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Canadian executives prioritize U.S. relations over those with China

Stacey Newman/Getty Images/iStockphoto

Prime minister Jean Chretien's "Team Canada" mission to China in 1994 was viewed as a much-needed effort to accelerate relations with the world's most populous country. Prime Minister Justin Trudeau's visit to China this fall was seen by some in a similar light, as having the potential to "reset" the relationship.

Canada-China relations have foundered over questions of politics and human rights for decades. An added concern among some is that Canada simply lags other countries in its efforts to engage China.

Senior advisers to Canada's government have pointed to Australia or companies in the United States as examples of governments or businesses that have been far more strategic. Without a concerted and sophisticated approach, Canada risks being shut out of opportunities in the world's largest market.

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Read more: Canadian executives worried that protectionism could hurt trade

Read more: Canadian firms are slowly embracing extended relations with China

The view from the C-Suite is somewhat different. Most business leaders are reasonably satisfied with Canada's trade relations with China. Many think the Prime Minister is in no better or worse a position than his predecessor when it comes to engaging with China's leadership. Few believe Canada has fallen short of expectations in engaging with China.

They are somewhat more likely to agree Canadian businesses are not as successful as U.S. or European competitors. Yet nearly half believe Canada's companies do about as well as others when it comes to doing business in China.

Business leaders certainly agree we can do more. They say visits such as the Prime Minister's are important and the vast majority want Canada to pursue a free-trade agreement.

Yet what most expect of government is not necessarily what they envision for their own businesses. The worldview of most executives puts a priority on the United States and Canada. Many believe China will be somewhat important to their business, but fewer think it is very important. Manufacturers, as well as mining or oil and gas, are among the sectors that are more likely to prioritize China. Others are less likely to do so. Among Ontario head offices in particular, just over half said China will not be an important market for them in the next five years. Interest in Europe, Britain and India is even weaker as the C-Suite doubles down on North America.

Canada's proximity and ties to the United States make this understandable. A country such as Australia has made a concerted effort to engage China out of necessity. Many Canadian businesses don't see opportunities there for their business models, or know that doing business there requires substantial attention. Building relations in China is time- and resource-consuming.

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When it comes to engagement with China, the fact remains that there will be two solitudes in the business community. There are many who will see the cause of relations with China as important, but simply not urgent for their businesses.

David Herle is principal and Alex Swann is vice-president of Gandalf Group

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