Monday, November 14, 2011

Canada-China trade diversifying beyond commodities


 


Trade between British Columbia and China is moving to a new level, outgoing Chinese Consul-general Liang Shugen said in an interview on the changes in relations that have taken place during his three-year tenure in Vancouver.
The emphasis is no longer on investing in China and importing Chinese-made goods, he said. Now, trade has broadened into two-way business relationships and Chinese companies are seeking stronger relationships with companies here. As more Chinese business investment comes into this province, it is opening up new opportunities for trade beyond the traditional commodities.
In a wide-ranging interview at the Granville Street consulate before returning home Nov. 10, Liang offered his thoughts on the changes he has witnessed and his opinions on everything from trade to local concerns over foreign investment in real estate.
On the trade front, he urged British Columbians to look west across the Pacific and forge stronger trade relations with Asia.
"It's not only minerals, it's not only coal and LNG [liquefied natural gas]," he said. "It's B.C.'s lumber, B.C.'s seafood, B.C.'s Okanagan wines. There are lots of opportunities.
"This is two-way trade and two-way investment."
On calls for restrictions on foreign investment in Vancouver's high-priced real estate, he said he would like to see the housing market remain open.
"This [real estate] is a commercial activity and I don't think people should link it to politics."
"It's a free market," he said. "But I also have sympathy for Vancouverites who say, 'I have saved my money and would like to buy a house or buy a flat.' "
Characteristics that attract Chinese immigrants, he said, are business opportunities, Vancouver's educational facilities and the beauty of the city.
Liang put some numbers on the size and growth of Chinese trade, saying that during the last 10 years, imports to China have totalled $8 trillion US. China expects to import that much again - $8 trillion US - within the next five years, he said. The growth will be in the variety of products imported as well as the volumes, he said.
"There will be at least $1 trillion US in imports every year. You cannot just import iron ore, you cannot just import oil. You have to import some of the seafood, salmon, crab, geoduck, lobsters."
An aid in stimulating the growth of the export and import of food and perishable products, he said, is the recently opened air cargo route between Vancouver and Shanghai by China Southern Airlines.
China Southern's route, which is flown four times a week, is the first dedicated cargo service from Canada to China.
Liang said BC-China trade now totals $12 billion a year, accounting for one third of all bilateral trade between Canada and China.
"You can see how close the relationship is between B.C. and China."
He singled out education, science and technology as future areas of trade growth. There are an estimated 30,000 students from China now studying in B.C., he said.
This is the second time Liang has been posted to Vancouver, arriving in 2008 for his threeyear tenure as consul-general. His first posting was in 1988 for four years, when Vancouver was just emerging on the world stage after Expo 86.
Much has changed since then, he said. Vancouver was not as focused on Asia, and China was still in the midst of economic reform. The consulate was much smaller. Now it is one of the largest, if not the largest, consulates in Vancouver with a staff of 27 at the modern brick, wood, and glass consulate that sits behind a high wall at 16th and Granville.
Despite the growth of trade in food and education, commodities, particularly natural gas, will remain in high demand in China, Liang said.
And the sooner Canadians build the liquid natural gas terminals planned for Kitimat, the sooner B.C. can participate in the Asian natural gas boom, he said.
The window is open now for Canadian natural gas, he said, but the longer it takes for B.C. to enter the market, the more competition it will face.
Already Australia is exporting LNG to southern China after signing a $20-billion deal several years ago. Further, China has built a gas pipeline from Western Asia to China and is planning one from Russia.
"Hurry up," he said. "Don't only look south of the border. Look across the Pacific. You are rich in natural resources and natural gas.
"I hope that this [Kitimat LNG] facility can be finished at an early date to export to China or other Asian countries as soon as possible for the benefit of Canada, for the benefit of China or the benefit of any country that would import from Canada."
Natural gas may be more expensive than coal for China to import, Liang said, "but the government is determined to reduce pollution and to help the country attain sustainable economic development."
ghamilton@vancouversun.com


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