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NOTES FOR AN ADDRESS BY

THE HONOURABLE SERGIO MARCHI,

MINISTER FOR INTERNATIONAL TRADE,

TO THE

CANADIAN CHAMBER OF COMMERCE IN HONG KONG

HONG KONG, China

April 3, 1998

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

I would like to begin by thanking the Canadian Chamber of Commerce in Hong Kong for hosting this great event.

As you know, earlier this week I began my trade mission in Beijing and Shanghai. As the final leg of my trip, I am delighted to be here in Hong Kong -- a region that has become the symbol of the new China and the face of Asian prosperity to the world. You don't have to be here very long before you feel the excitement, the dynamism and the energy of this place!

You also don't have to be here very long before you begin to feel the Canadian presence. More than 150 000 Canadians live in Hong Kong and the ties between us are strengthened by the half million people of Hong Kong origin living in Canada.

Our strong people-to-people ties mean that Hong Kong's continued autonomy, prosperity and the well-being of its people are of direct importance to Canada.

For Canadian businesses, Hong Kong represents a natural fit: English is the major language of business, British common law is the basis of contracts and the banking system, and other business structures are familiar. Yours is the largest Canadian Chamber of Commerce outside Canada, and Hong Kong boasts over 20 Canadian university alumni associations. It's no wonder we feel so much at home here!

Just how important is our relationship with Hong Kong? Well, in 1996, Canadian exports here totalled more than $1.5 billion. Canada, in turn, imported about $1.1 billion from Hong Kong. This is Canada's seventh-largest trading partner in the world, and our fourth-largest in Asia. In fact, when combined with China, you form our third-largest trading partner in the world.

It is also the single-most important source of immigration and immigration-related investment for Canada. Not surprisingly, Mandarin and Cantonese are now the most spoken languages in our country after English and French. We Italians are losing ground!

As important as the Hong Kong market is in its own right, I believe its role as an entry point to the broader China market may be even more significant. The emergence of China as a world force and a mega-economy engages Canada on all dimensions of our foreign policy priorities, not the least of which is trade.

As an entry point, this market is particularly valuable for small and medium-sized enterprises [SMEs], which at least at the outset, do not have the experience or resources to directly penetrate the often daunting uncertainties and complexities of the Chinese market.

I am very grateful for the hard work your organizations have invested in opening doors and paving the way. Many of you have been at this for some time, and it must be very gratifying to see how trade and investment between China and Canada have expanded over the years. It has sometimes been a tough struggle, but you have kept the faith and stayed the course and now all of us are benefiting from your efforts.

In this regard, I would like to commend the Canadian Chamber of Commerce for its initiative in establishing an annual award recognizing the Canadian-based SME that has been most successful in launching or sustaining its presence in Hong Kong and the region.

Through the years, China and Canada have come to know one another better. Cultural exchanges have broadened understanding and enhanced appreciation for our respective cultures. And we have created strong academic relations. More than 12 000 Hong Kong students studied in Canada in 1996, and the Canadian Education Centre in Hong Kong aims to attract even more students to Canada. Increasingly, a Canadian education is becoming an important export commodity.

In the case of Hong Kong business students, they don't even have to leave home to receive a Canadian education; there are three Canadian universities offering business courses right here in Hong Kong. Add to these connections the strong bonds of family and, increasingly, of commerce, and you have a relationship that is firmly rooted in the past and well positioned for the future.

And make no mistake, strong as our relationship may be and dramatic as the increase in trade and investment between us has been, we're just getting started.

As we approach the next century -- which has often been predicted to be the "Pacific century" -- Canada is looking more and more to the Pacific Rim for our own economic growth. We recognize that our future is here, that the markets are here, that the greatest opportunities of tomorrow are here.

And as the business, financial and communications centre of Asia, Hong Kong is a natural place for us to concentrate our efforts -- not only as a destination, but as a gateway for the re-export of Canadian goods to China.

Less than a year ago, Canadians, like people around the world, watched the reversion of Hong Kong to China. We have been very impressed at how well the People's Republic of China has handled the transition, and we remain committed to maintaining our close relations with this dynamic region.

In my meetings today with Chief Executive Tung Chee Hwa and Chief Secretary Anson Chan, it became clear to me that Hong Kongers are running Hong Kong. I am greatly encouraged by the degree to which Beijing has stepped back to allow the Administration to get on with its work.

In Beijing, we have recently seen some of the sweeping proposals for reform coming out of the National People's Congress, and we applaud the initiatives of the Chinese government to move toward a market economy.

Many of the reforms, particularly on the political side, have not gone as far or moved as quickly as we would have liked, but we see the trend and we know where it is headed.

So we are here today not only to seek mutually advantageous commercial relations, but also to express our confidence in the process of reform. We will continue to support that process by engaging, not isolating China. And we will demonstrate that support by investing and doing business here. We believe that it is possible to walk arm in arm, even if we don't always see eye to eye.

For Canadian business people, China can be a challenging market -- who knows that better than you? In fact, I suspect that many of you can identify with one of Yogi Berra's famous expressions when he said that he didn't mind being surprised, so long as he knew beforehand. Surprises -- and not always pleasant ones -- can often characterize doing business in this market. But you also know that the difficulties pale against the possibilities.

Let me just mention one such possibility -- the potential for Canadian businesses in the agri-food sector.

Earlier today, I participated in the launch of the "President's Choice" line of products, in the Parkview Park-and-Shop Supermarket. Many Canadians are already familiar with this product line, and I am delighted that we are bringing it to Hong Kong.

When I heard about plans to introduce these products to China, I wondered if they were going to name their line of sauces after Canadian cities: "Memories of Red Deer" just doesn't seem to have the same ring as "Memories of Kyoto"!

But the potential for Canadian food products is tremendous. Canadian food exports to Hong Kong have increased from $17 million in 1986, to $590 million in 1996 -- a 34-fold increase! With 22 percent of the world's population and only 7 percent of the world's arable land, Canada can carve itself a niche in this important market.

And I know that the Canadian companies on this mission are excited about partnership opportunities with Hong Kong businesses in many other sectors as well.

As Hong Kong and China continue to grow and to play increasingly larger roles in the global economy, Canada stands ready as a firm friend and reliable partner to assist in that growth and to encourage continued political and economic reforms. In my meetings today, I reaffirmed Canada's strong support both for continuity and for positive and healthy evolutionary change.

I should also commend Mr. Tung and his team for the steady hand and firm resolve with which Hong Kong has faced and managed the effects of regional financial and economic turmoil. Hong Kong is in a strong position to weather the storms. Despite the uncertainties, Canadian businesses know that now is not the time to cut and run. We are here for the long term, as the potential for this region is significant.

In the years ahead, Hong Kong will remain a vital source of investment, a fertile market for Canadian goods and services and an ideal base from which to gain access to markets in China and the Pacific Rim.

A few days ago -- on April 1 -- it was National Tree Planting Day in China. As I thought about that, I was reminded of a French story and a Chinese proverb.

The French story is about that great marshal, Louis Hubert Lyautey. Marshal Lyautey once asked his gardener to plant a tree. But the gardener objected, arguing that the tree was slow-growing and would not reach maturity for many years. The marshal replied, "then we have no time to lose. Plant it this afternoon."

And the old Chinese proverb counsels, "Be not afraid of growing slowly. Be only afraid of standing still."

The full maturation of the Chinese-Canadian relationship -- including that with Hong Kong -- may still be years away. But we have no time to lose. Let us continue to cultivate and nourish it. And let us ensure that we never, ever stand still.

Thank you.