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NOTES FOR AN ADDRESS BY

THE HONOURABLE SERGIO MARCHI,

MINISTER FOR INTERNATIONAL TRADE,

TO THE CANADA-CHINA BUSINESS COUNCIL

AND THE

HONG KONG-CANADA BUSINESS ASSOCIATION

VANCOUVER, British Columbia

March 27, 1998

This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca

I would like to thank the Canada-China Business Council [CCBC] and Hong Kong-Canada Business Association for hosting this wonderful event.

Let me begin by congratulating the Council on your 20th anniversary!

You know, 1978 was a significant year: not only did the CCBC start up, but China and Japan signed a Treaty of Peace and Friendship, Israel and Egypt signed the Camp David Accord and disco music was all the rage. Well, three out of four isn't bad!

But in the intervening years, your Council has emerged as a vital voice for the promotion of trade and investment between our two great countries, and today I salute you on this significant milestone.

I am particularly pleased to be with you on the eve of my trip to China.

Someone reminded me that this may be the last Western-style food I see for some time, and that during the next few days I could be dining on somewhat more exotic fare. So I'm looking forward to that!

I am also delighted that 84 business people will be accompanying me on this mission -- the largest such mission in many years. And the majority of these businesses are not members of the CCBC, so we have some new converts to the cause!

I am also looking forward to this visit because these are such exciting times in China and in China-Canada relations.

I'm sure that like me you have been following the news coming out of China over the past few weeks.

And, I must say that we have been encouraged by the bold steps announced by the Chinese government in a number of areas, such as the recapitalization of banks and the sweeping proposals to privatize large numbers of state-owned enterprises and to implement other far-reaching economic reforms.

These are important steps in the right direction and demonstrate China's determination to move toward a market economy. Trade is an integral part of that open market, and I look forward to working with the new Trade Minister for China, Minister Shi, in advancing the trade agenda, bilaterally, as well as multilaterally.

This is also an exciting time in relations between our two countries. We have just completed Canada's Year of Asia-Pacific and the chairing of the APEC [Asia-Pacific Economic Cooperation forum], which dramatically raised the profile of China and other Asian countries, right across Canada.

And, this was, of course, immediately followed by President Jiang Zemin's state visit. This was an excellent opportunity for the President and Prime Minister Chrétien to continue the open political dialogue that had begun during the Prime Minister's visits to China in 1994 and 1996.

These high-level contacts were bookends around the 1995 visit of Premier Li Peng -- a visit that also marked the 25th anniversary of Pierre Trudeau's courageous move to recognize the People's Republic of China.

In fact, since 1994, the Prime Minister and a Chinese leader have participated in every one of your annual meetings: a record I doubt any other business association could match.

Last November, Canada also hosted the APEC [Asia-Pacific Economic Cooperation forum] Summit, a Summit that made significant progress in the area of trade liberalization.

And throughout the year, there were literally hundreds of commercial and cultural events that reminded Canadians of their Pacific identity and of the opportunities that await us there.

So, there is tremendous momentum in the China-Canada relationship, and one of the overall goals for our trip to China this week is to maintain that very momentum.

My job is made both easier and more enjoyable by the very high quality of business representatives that will be joining us, and I have every confidence that this mission will be a success.

This morning, I would like to provide you with a brief overview of our trip: Why a mission to China, what its focus will be, and what the expectations we have set are.

Some people have questioned our emphasis on China. With the U.S. market so close and so accessible, they wonder, why travel halfway around the world to look for new business? Add to that the linguistic and cultural differences and, they say, it seems like a lot of effort for uncertain returns.

But you and I know better. You and I know that Canada and China should be trading and investing in each other's economies -- that the market is huge, that the opportunities are great, and that the time is right.

We also know that the enormous potential of China is clearly understood by others, and that if Canada wants to participate in its growth, we must continue to invest the time and build the relationships that will allow us to do so. Because if we don't, someone else will.

Indeed, the Trade Ministers of France and South Africa will be going to China with business delegations a few days after our mission.

And while China may be our third most important trading partner, we know that we are still only scratching the surface of what could be.

The numbers are compelling: with nearly one-quarter of the world's population and a middle class expected to reach 500 million by the year 2010, China is a market no nation can afford to forgo.

And, certainly Canada, a nation which is so dependent upon trade and which needs to find new markets and new opportunities, has no intention of watching from the sidelines.

So, the time has come to update Horace Greely's famous advice: It is time to go East, young people, go East.

And, beginning tomorrow, that's exactly what we are going to do. Our delegation will visit Beijing, Shanghai and Hong Kong with four goals in mind.

First, trade promotion and development.

In Beijing and Shanghai, we will focus on the power, construction, financial services, oil and gas, and agri-food sectors. With the recent restructuring in China, opportunities in power generation are particularly promising.

In Hong Kong, we will be exploring opportunities in agri-food, education services and construction materials. And, of course, these are just some of the sectors where Canada can use Hong Kong as a gateway to China.

In all of these areas, Canadian companies have world-leading technology to offer. In fact, there is a tremendous "fit" between what China needs and what Canada can provide.

In 1994, Prime Minister Chrétien and Premier Li Peng challenged the business communities in each nation to achieve the goal of $20 billion in bilateral trade by the year 2000. The problems in Asia may defer the timing of that goal but, make no mistake, we're going to make it! So trade development will be an important part of the mission.

Second, we want to advance the trade policy agenda. There are a number of significant trade issues that remain unresolved.

Chief among these is access to the Chinese market, which has been hampered by high tariffs and by a lack of transparency and of a rules-based application of regulations. Our priority is the simplification and greater transparency of the customs system.

We have been negotiating with China in all of these areas, both bilaterally and multilaterally, and I will certainly be raising them again next week.

I will also discuss China's efforts in preparing itself to join the WTO [World Trade Organization]. I am confident that progress can be made on this front. As well, our negotiators meet on this important matter in Geneva, a week after my trip, so the timing for political direction and engagement could not be better.

Third, the mission will accentuate what I call the "social dividends" of freer trade.

For me, these issues are just as important as "traditional" trade issues because they speak to the human side of the economic equation.

For example, the Canadian International Development Agency [CIDA] is working to reduce poverty in the interior provinces by promoting Canadian expertise in areas such as sustainable dryland farming techniques, dairy and pig farming. These projects prevent further environmental degradation, improve the livelihoods of the people, and reduce hunger and malnutrition.

Canada is also sharing its managerial and technical expertise to help China meet its energy and transport needs. For example, another CIDA project, managed by Nova Gas International and D&S International Consultants of Calgary, is helping China to meet its oil and gas requirements with state-of-the-art Canadian technology.

A number of Canadian companies, several of which will be on the mission, are assisting the Chinese Ministry of Construction to develop energy-efficiency building standards, based on Canadian technology that is adapted for China.

There are several new initiatives for building on the strong education and tourism links that exist between our two countries. We know the value that comes from students learning and working together in one another's culture.

Clearly, the economic benefits that flow from trade and commerce, enhance the social dividends of both nations. This isn't only good business, it's big business.

Finally, our fourth goal is to further strengthen the political dialogue between our two countries. Our relationship is strong, and it is no accident that I will be the first foreign government minister to meet with China's new Trade Minister.

As well, Canada will continue to focus on helping China improve governance, respect for human rights and democratic development processes. We have always believed that influence in these areas can best be achieved by engaging, not isolating, China.

Earlier this month, we were pleased to co-host, with China, a multilateral symposium on legal questions related to human rights, and we look forward to continued productive dialogue on human rights questions.

Our goal is the full integration of China into the global political and economic institutions. And, we will continue to support efforts in the areas of political and civil rights, religious freedoms, and economic, social and cultural rights.

Making progress on trade promotion, advancing the trade agenda, supporting the conditions that will produce social dividends for the Chinese people and continuing the political dialogue: these are our goals as we embark on our mission.

We are under no illusions as to the challenges before us. But we also know that China is on the verge of profound changes: that the China of today will be unrecognizable to the world just a few short years from now.

And, I firmly believe that when Canadians of that future time look back on the steps we are taking now, and on the leadership your Council is providing, they will recognize that we were right to persevere in building our relationship with China.

Today, trade and investment between China and Canada is still in its infancy. But we know its potential. We know how it can grow. We know what it can become. And we know what it can mean to both countries.

So, let us continue to work at it, to believe in it and to nurture it. And let us not stop until it has reached its full maturity.

Thank you.