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/526329
154 BCBusiness July 2015 Canada's $19.8 billion total. Global com- petitors such as Australia ($72.5 billion) and Brazil ($41.3 billion) sell far more of the same kinds of commodities (includ- ing coal and non-precious metals) to the Chinese. Progress in China, Hansen says, does not come quickly. It takes years of relationship building to lay the ground- work for actual trade. He recalls how in 2003 the provin- cial government opened an office in Shanghai called the Canada Wood Project to promote B.C. forestry prod- ucts. "Initially people were very skepti- cal and said that you're not going to sell lumber into China because they don't use lumber for construction." For the first three years afterward, lumber sales to China remained f lat, staying below $65 million per year. But in 2011, that total soared to $1.4 billion and has remained at that level since. "I think it's sort of a classic story about doing business in China," says Hansen. "You're not going to go in and fill an order book on your first trip." The former B.C. finance minister's most recent trip sees him on a mission to help Vancouver g row into a hub for international financial services to facili- tate trade between Asia and North America. Part of that mission includes promoting the new Vancouver-based ren- minbi trading hub, which was announced last November (more on that on p.158). The hub means that Canadian businesses wanting to do business with Chinese ones will no longer need to convert their Canadian dollars to U.S. dollars before converting again to Chinese currency—nor will they need to settle trade transactions through a bank in Hong Kong, where it is typically done now. In 2004, the Bank of China (Hong Kong) Limited became the first institu- tion outside of Mainland China to be designated by China's central bank, the People's Bank of China, as a clearing bank for settling RMB transactions. Vancouver—with its dearth of head offices—seems an odd place to grow a financial hub, but Hansen has his sales pitch ready. "Vancouver is the gateway for Canada when it comes to exports— and not to forget Prince Rupert as well, which is growing rapidly," he says. "But the other big advantage we have is time zone. The end of the business day in Van- couver overlaps with the start of the busi- ness day in Asia." As such, companies and financial institutions can work out details in real time with a phone call or an email. An expanded financial services sector would help diversify a provincial economy that remains heavily depen- dent on natural resources. B.C. must expand beyond these traditional indus- tries if it wants to take part in China's next chapter of growth. The Economist Intelligence Unit projects China's real GDP growth will slow considerably in the years to come, averaging 6.3 per cent between 2014 and 2020 before slowing to 4.1 per cent for the decade after. Already, China's enormous manufacturing sector is losing steam, with service industries such as logistics, retail and information technology now employing nearly 40 per cent of China's workforce. The Chinese government has indicated that its goal is to move away from energy-intensive, high-polluting industries and toward technology industries and services— and that could diminish the country's ★ ★ ★ ★ ★ ★ ★ Doing Business in C h i n a