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Bank of Canada Governor Mark Carney, during a visit to the Editorial Board at The Globe and Mail, Thursday, September 16, 2010.Peter Power/The Globe and Mail

The increasing heft that emerging powers such as China, India and Brazil wield in global economic affairs represents a permanent sea change and Canadian companies need to adapt, Bank of Canada Governor Mark Carney said Thursday.

Speaking to The Globe and Mail's editorial board, Mr. Carney said the need for "decoupling" from the U.S. and other advanced economies provides a "tremendous opportunity" for Canadian firms - if they're ready and willing to take advantage.

"We've moved to a multipolar world in terms of economic power, and this is not a temporary shift," Mr. Carney said. "It doesn't for everyone mean that we're going to have an opportunity to sell in Brazil, India, China necessarily. But it does mean that elements of the supply chain in which every business operates will change, so understanding that better is going to be important.''

Many Canadian companies have made strides to find new customers in faraway corners of the world and replace those they lost when exports to the United States plunged in 2008. But around 70 per cent of the country's sales abroad are still shipped south of the border. Canadian factory sales slipped in July, as car shipments to the U.S. fell, and the country's trade deficit swelled to a record. Mr. Carney last week cited "renewed weakness" in the U.S. economy as a key driver of the "unusual uncertainty" worldwide which policy makers are weighing against Canada's domestic recovery.

The need to push into new markets "is ultimately a good thing for Canada," Mr. Carney said, "because it gives us diversification and it builds on some of our strengths, from the cultural side to just our geography, which is quite helpful." However, succeeding in the new climate will "take a substantial reorientation for all Canadian business," and "everybody, from government to small business, has to think through what its potential implications are," he said.

On top of benefiting companies that seize on the opportunity, efforts by several nations to reduce their reliance on the fragile U.S. market will help make the global economy less prone to moving in "one exaggerated cycle," Mr. Carney said.

The central bank governor has played a leading role at the Group of 20 - which during the crisis became the world's premier forum for economic matters as emerging powers demanded more clout - in working to create a framework for global growth that's more sustainable than the version that collapsed two years ago.

For advanced economies, that has meant governments and households committing to repair their balance sheets after decades of overspending, as well as measures to make the global financial system more resilient to economic shocks. For emerging nations, the focus is on boosting domestic demand and reducing reliance on exports, in no small part by stripping away the built-in advantage many of those countries give their manufacturing sectors by pegging their currencies against the U.S. dollar.

The need for emerging-market powerhouses such as China to let their currencies appreciate is "not a slogan," Mr. Carney told The Globe's editorial board, sharpening his criticism as an increasingly loud chorus in the U.S. pushes the Asian giant to allow the yuan to make faster and more significant gains. Increased exchange-rate flexibility is a vital piece of the "grand bargain" that advanced and emerging nations struck at the G20 summit in Toronto, he said.

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