Why Trade Matters
Trade and the Canadian Economy
Canada and China: Diversifying Relations
Stories of the Week - October 27, 2003:
Canada and China enjoy a prosperous, well-established relationship, enhanced by strong personal and trade ties.
The affinities that exist between the two countries played an instrumental role during Prime Minister Jean Chrétien's recent visit to China, which took place from October 21 to 24, 2003, and wrapped up with the signing of three new agreements relating to initiatives in the areas of the environment, education, legislative practices, health and agriculture.
In terms of trade ties, China closed the gap in the 1990s and replaced Japan in 2002 as Canada's second largest import supplier. As for Canadian exports to China, they hovered around $4.1 billion.
The personal relationships that unite Canada and China are just as important. China and Hong Kong are the leading source of immigrants to Canada, including 33,000 newcomers in 2002 alone.
Over one million Canadians are of Chinese descent, and Chinese is now the third most spoken language in Canada.
This week's edition of Stories of the Week shines the spotlight on Canadian firms that are doing business in China, reaping the benefits of their participation in the 2001 Team Canada trade mission.
Stories of the Week - October 27, 2003
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The World's Largest Grower of Hydroponic Lettuce
HydroNov Inc., Mirabel, Quebec
Greenhouses worldwide rely on hydroponic growing systems developed by HydroNov Inc., a subsidiary of HydroSerre Mirabel Inc. - the biggest hydroponic lettuce grower in the world. HydroNov's revolutionary Floating Rafts Growing Technology was originally developed at the University of Arizona in the late 1970s. It is among the most water-conserving systems, producing leafy vegetables at four times the rate of traditional soil-based methods.
With a population of more than 1.3 billion and a shortage of arable land, it's no surprise that China would be attracted to such a high-output system. HydroNov currently has five joint venture operations in China, producing Butterhead lettuce and a selection of Asian vegetables. Two of these partnerships were sealed during the 2001 Team Canada trade mission. "We had been negotiating with these two clients for several years," says HydroNov President Luc Desrochers. "The Chinese place a very high value on the backing of government, so the trade mission provided the perfect forum for formalizing and signing the contracts."
Over the years, the company has received support from the Canadian International Development Agency's Industrial Cooperation Program, Export Development Canada and trade commissioners in China. Desrochers sees such assistance as one of the steps to establishing a business base. "You cannot rely solely on government support, but it is valuable as part of a larger strategy," he says. For companies contemplating the Chinese market, he offers some advice: "Your first priority should be to make sure you have an affinity for this culture. Otherwise, because business and cultural practices are so different from Western ways, everything will look complicated and negative. Second is to be able to count on competent local people who can build the bridge between the two cultures. And third is to be able to adapt your goals and methods to local realities."
HydroNov also exports its technology to Japan, Mexico, the Middle East and the United States.
Working in China and Around the World
Niagara College, Niagara-on-the-Lake, Ontario
With an international presence in some 30 countries, Niagara College provides 70 full-time degree and diploma programs and 12 postgraduate certificate programs to 6,000 full-time and 18,000 part-time students at its three campuses.
During the Team Canada 2001 trade mission to China, Niagara College signed four-year agreements with two Shanghai colleges. The first, with Shanghai Commercial Polytechnic, allows for the delivery of Niagara's computer programmer diploma; the second agreement, with Shanghai Commercial School, provides a Niagara College international business program.
"To date these programs have involved over 250 students and given exciting, international professional development opportunities to federally sponsored youth interns and to Niagara College staff," says Martha Casson, Vice-President of Enterprise and Student Services. Niagara College has previously participated in the CIDA-funded Canadian College Partnership Program, in countries such as Ecuador, India, Jordan, South Africa and Thailand. Niagara College also accepts students through a partnership program with Sanda University in Shanghai and continues its presence on the board of directors of the Institute of Vocational Training. "Enrolment of students from China continues to increase, especially in our well-known hospitality and tourism programs," says Casson.
Patience and Perseverance: Keys to Success in China
SW Newfield Seeds Company Ltd., Nippawin, Saskatchewan
For nearly two decades, SW Newfield Seeds has been supplying China with winter-hardy foraging seeds and legumes, which are highly sought after in the country's northeastern provinces.
Most of SW Newfield Seeds' competitors in Europe and the United States specialize in turf seed, says Janet Stoner, Manager of the Global Marketing Division. "This represents a huge market in China, but only in the cities and mainly due to the 2008 Olympics," she explains. "Our advantage comes from concentrating on forage grasses and legumes, and providing more of a complete package that fits the needs of farming and rural communities in China." In 1999, in response to a dramatic increase in business, SW Newfield Seeds established an office in Beijing.
Stoner says the key to success in China is patience: "It takes time, resources and some investment. The market doesn't work the same way as it does here in North America." She also stresses the importance of making regular visits: "You have to support your operation and meet with your representative and your customers." SW Newfield Seeds was a participant in the Team Canada 2001 trade mission to China; this helped the company strengthen relations with existing partners. "It goes a long way with a Chinese business person to be invited to attend a banquet with Canada's Prime Minister at the Great Hall of the People," says Stoner. "You can't put a dollar figure on that but it certainly brings benefits in the long term."
One of the largest dry-land forage grass seed company in Canada, SW Newfield Seeds also exports to Europe, South America and the United States. It is a wholly owned subsidiary of SW Seed of Sweden, one of the world's premier plant-breeding companies.
A Strong Advocate of the Importance of Exporting
Whiting Equipment Canada Inc., Welland, Ontario
In 1997, Whiting Equipment Canada Inc. - a designer and manufacturer of heavy industrial equipment - started a joint venture company in the Chinese municipality of Tongxiang, near Shanghai. Today, Zhejiang Namag Equipment Manufacturing Co. Ltd. (NAMAG for short) is the fastest growing part of Whiting's business. Using North American technology and Chinese manufacturing processes, NAMAG produces industrial components for foreign multinationals that, for one reason or another, need Chinese or Canadian content in their end products. "The plant has exceeded our expectations and we are now working towards expanding our operations in China," says Rudi Kroeker, President and CEO of Whiting Equipment Canada. In 1998, the joint venture led to the sistering of Tongxiang with Welland and the Niagara Region.
A strong advocate of the importance of exporting to small and medium-sized enterprises, Kroeker regularly shares his expertise on doing business with China by speaking at government-sponsored and business association events in Canada and Asia. During the Team Canada trade mission to China in 2001, Kroeker was informed of NAMAG's appointment as a strategic supplier to one of the world's largest industrial corporations. Since then, the company has become an approved supplier to several other "blue chip" multinational corporations, such as Bayer and BASF.
Whiting Equipment Canada Inc., a subsidiary of Illinois-based Whiting Corporation, is pursuing opportunities for equity investments in other parts of Asia as well. "The one reliable augur for your company's future," adds Kroeker, "is doing what you have already achieved at home - as well as or better - in a foreign market."
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