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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. MARCHI - ADDRESS TO THE CANADIAN BUSINESS FORUM - SHANGHAI, CHINA</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> 98/26 CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE SERGIO MARCHI, MINISTER FOR INTERNATIONAL TRADE, TO THE CANADIAN BUSINESS FORUM SHANGHAI, China April 2, 1998 This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca Let me begin by thanking the Canadian Business Forum for sponsoring this wonderful luncheon. Our delegation has been in China for about five days now, and we have certainly appreciated the warm hospitality extended to us. We appreciate the efforts of this Forum, not only for today's event, but for your ongoing collaboration with the Canadian Consulate General in Shanghai to promote trade and investment between our two countries. It is always exciting to be in the centre of the action, and as soon as one enters Shanghai, that's exactly the impression one gets. Located within a 500-kilometre radius are 35 cities with populations of one million or more. In addition, Shanghai accounts for over 25 percent of the two-way trade between Canada and China. This is a market that no business person can afford to ignore! Shanghai has long been China's most dynamic, most progressive and most western city. Now, it is also increasingly the source of China's political leadership, with your former mayors, assuming duties as President and Premier. It says something about the pride of the Shanghainese that some of them consider these to be lateral appointments! Canada was honoured to host President Jiang last year -- a visit that enabled him and Prime Minister Chrétien to continue the open political dialogue that had begun during the Prime Minister's previous visits to China in 1994 and 1996. And we are looking forward to welcoming the current Mayor of Shanghai to Canada later this spring. As you know, 1997 was designated the Year of Asia Pacific in Canada. It was an exciting and important year, one that featured over 600 cultural and commercial exchanges. Together with President Jiang's visit and the APEC meeting in Vancouver, China's profile in Canada has risen dramatically. And we intend to keep it at the forefront. So we come today to this city and this country at a time of tremendous momentum in our relationship, and also at a time when China is emerging as a dominant player in the global economy. Canada understands the potential of this region. By the year 2000, Asia Pacific will account for 60 percent of the world's population, 50 percent of the world's GDP [gross domestic product] and 40 percent of global consumption. In two years, none of the world's 20 largest cities will be in Europe or the United States. And by 2010, China alone, is expected to have over 500 million middle-class consumers. For a trading nation like Canada, which also happens to have one coast touching the Pacific and a vibrant Chinese immigrant population, the writing on the wall could not be clearer: we must go where the growth will be; we must expand our relationship with China. The Department of Foreign Affairs and International Trade and our provincial and municipal partners continue to look for new and innovative ways to support Canadian exporters. Last fall, I released the Canada-China Trade Action Plan, which provides a blueprint for trade with China and identifies the sectors that offer the most potential for Canadian companies. If you don't have a copy of this Plan, you can pick one up today before you leave. The problem in China is not, of course, finding opportunity, but rather, selecting which opportunity you want to pursue. That's where our trade officers in the Consulate can help. They know the market, they know the players, they know the way things are done here, and they can be an invaluable resource. Please use them! With the wealth of opportunities awaiting Canadians here in Shanghai, it is tempting to try to talk about all of them. But today, let me focus on just three. The first is in the area of construction and infrastructure. The Yangtze Delta has over 70 million inhabitants, and the strong growth in the construction sector of Shanghai has been replicated in many other cities within this region. Several Canadian companies are already engaged in housing projects in and around Shanghai -- companies such as Davie International Inc., Easy Field Consultants, and Michael H. K. Wong Architects and Planners, all of whom are with us here on the mission. In fact, Canadian exports to China of construction products, materials and services more than doubled between 1992 and 1996. Canadian companies have had particular success in providing design, engineering and architectural services here in Shanghai. As incomes of urban dwellers continue to rise, the demand for high quality, energy-efficient housing will also increase. This means real opportunities for Canadian companies. The housing market will also benefit from two important developments. The first is the introduction of mortgage financing and the second is the new Construction Law, passed just last month. That law aims to improve transparency of the project approval process, enhance worker safety and promote fair business practices. As well, the Canadian International Development Agency [CIDA] is currently involved in a five-year project to demonstrate Canadian capability in the area of energy-efficient building construction, with demonstration sites in Shanghai, Beijing and Harbin. A number of Canadian companies such as Soprin International and ADS International are transferring technology and establishing joint manufacturing facilities. The move toward sustainable development will not only benefit our housing sector, but our environmental technology sector as well. China is recognizing the need to address serious energy and pollution problems, as witnessed by the large delegation they sent to Globe 96 and Globe 98 in Vancouver. Canadian companies, both large and small, are well-positioned to offer their expertise in this vital area. A second area of great opportunity for Canadian businesses is agriculture and agri-food. The increasing popularity of western-style food and fish products here in the Yangtze Delta provides a large market for our products. We are delighted to have with us on this mission, Judy Foote, Minister of Trade for Newfoundland, who I'm sure can provide you with all sorts of information about fish products from that part of the country. As you know, China has set itself the goal of becoming self-sufficient in food as part of the Ninth Five-Year Plan. This provides enormous opportunities for Canada, which has some of the best agricultural technology in the world. From greenhouses to grain-handling equipment, animal genetics to feeding techniques, Canadian companies can provide state-of-the-art technology and equipment to assist China in its drive to increase agricultural efficiency. Third, and finally, there is tremendous opportunity to increase investment by Chinese, and specifically, Shanghainese, companies in Canada. At the moment, Chinese investment in Canada is limited to a few resource-based ventures. The time has come to diversify that portfolio into areas such as telecommunications, information technology and agri-food. I believe that the best way to attract Chinese investment to Canada is to simply lay out the facts -- facts like our balanced budget, low interest rates, low inflation, plus economic growth that is expected to be the highest of all G-8 countries. Facts like our standard of living, our clean and safe cities and our abundance of natural resources. Canada is a great story, and it's one we need to tell more often. Just how attractive Canada should be to international investors was demonstrated recently by a KPMG study that compared the costs of starting up a business in seven countries: Germany, France, Italy, the United States, the United Kingdom, Sweden and Canada. The study found that it is cheaper to set up and run a business in Canada than anywhere else studied. In other words, investors from Asia who want a gateway to the 400 million consumers of the NAFTA [North American Free Trade Agreement] market can do so in a more cost-effective way by looking to Canada rather than to the United States. This is a story that deserves to be told! This is a message that Chinese investors understand! And this is the message that I invite every Canadian business person to take to your contacts throughout this region. Construction, agriculture and investment -- these are just some of the areas of opportunity awaiting Canadian business here in China. You know better than I that the progress we have made to date -- in creating forums for Canadian involvement in the Pacific and in opening doors for Canadian companies -- is just a prelude to the work we still have to do. But thanks to the Canadian Business Forum and others, we have a solid foundation upon which to build. In 1975, as plans for the United States celebration of its Bicentennial were well under way, Premier Zhou En Lai was asked what he thought of the American Revolution, 200 years later. The Premier thought for a moment and then replied, "too soon to tell." Premier Zhou's response was steeped in 5000 years of Chinese history, and reflected the great Chinese virtue of always taking the long view. It was also a useful reminder of the need for patience when dealing with this market. Even here in Shanghai, where the pace of change is explosive and the quest for the new is unrelenting, we need to take the time to establish the relationships and develop the trust that will lead to successful, long-term enterprises. So let us invest the time, explore the opportunities and continue the work that has so well begun. Thank you. </body> </html>

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