With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/325830
140 BCBusiness July 2014 D avid Watt is the chief econo- mist for HSBC Bank Canada, a subsidiary of the leading international bank, HSBC Hold- ings PLC. He says doing busi- ness with the U.S. was never a bad idea in the past, but changing fortunes call for a more global outlook. "Especially in the last 20 years, the U.S. consumer has been a key driver of the global economy and global growth. So we didn't seem to have that urgency to develop a broader trade perspective," says Watt, arguing that, as a result, a lot of the Asian economies are unfamiliar to us. "We don't necessarily understand the culture, we don't understand what they need." Indeed, our survey respondents listed unfamiliarity with foreign mar- kets, along with regulations, as their biggest barriers to doing business inter- nationally. Watt says companies that were successful trading with the U.S. lacked incentive to invest the consider- able resources required to learn how to do business in Asia. "It takes time, and it takes investment, and it takes a lot of travel in order to become familiar with contacts and the opportunities there. So it always seems to be something that we'll get to in the future but we never sort of get to the point of examining how to take advantage of the opportuni- ties that we have there." The last few years, however, have shown the folly of relying too heavily on domestic and U.S. markets. B.C.-origin exports to the U.S. dropped from $22 billion in 2005 to just $12.9 billion in 2009 following that country's housing market implosion and resultant reces- sion. By 2013, those exports had only recovered to $15.5 billion. B.C. exports to Mainland China, by comparison, rose steadily from $1.2 bil- lion in 2004 to $6.6 billion in 2013, with the numbers climbing unabated—as though the Great Recession never hap- pened (U.S. and Canadian GDP shrank 2.8 per cent in 2009 while China's GDP grew at a 9.2 per cent clip). B.C. exports to Pacific Rim countries (excluding Japan) nearly tripled from $3.3 billion to Which countries do you predominantly do business with? Do you or your company currently do business outside of Canada? 81.6% 20.1% 30.9% 28.8% 14.6% 15.3% 6.6% 11.1% 18.8% united states Mexico european union china india Japan Russia brazil Other N0 62.1% YES 37.9% For approximately how long have you done business outside of Canada? More than 10 years 59.0% 5 to 10 Years 19.8% Less than 5 Years 21.2% n=878 n=288 n=288 p138-146-HSBC_advertorial.indd 140 2014-05-29 10:07 AM