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Canadian businesses need to seize momentum after PM’s China visit

Sarah Kutulakos is the executive director of the Canada China Business Council, Canada's largest and oldest organization devoted to building the economic ties between the two countries.

Prime Minister Justin Trudeau's first official visit to China was by any measure a success, and probably the most successful visit by a Canadian prime minister in two decades, according to some old China hands. This is very good news for Canadians.

The Canada China Business Council (CCBC) focuses on building the economic links in our long and deep relationship. Sadly, despite the importance to Canada of continuing to expand our relationship – not only economically but culturally, diplomatically and on every other front – the Canadian media too often frame it as a binary choice: "Human Rights or Trade?"

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Of course, the answer must always be both/and, not either/or. It always has been in our relationship. This attempt to "dumb down" the complexity of China for Canadian audiences does them a serious disservice.

In poll after poll, partly as a result of this type of coverage, Canadians show their ambivalence about China. On the economic front, there is one indisputable truth: China is our second-largest trading partner. China needs to be a part of every Canadian company's business strategy. Even if you are happy doing no international business beyond Cleveland, you need a China strategy. You are sure to encounter China in the form of customers and competitors – and likely even to meet those Chinese potential clients in Cleveland.

The question we need to ask is this: "What can we gain through closer economic ties with China?" Canadians are open to persuasion. Half agreed that they "could probably be persuaded to support a closer economic relationship with China," in a recent Asia Pacific Foundation poll.

Here is some powerful recent evidence that should form part of Canadians' understanding of the power and potential of our relationship with the country which will soon be the world's largest market and economy:

The Prime Minister lauded British Columbia's David Bromley Engineering Ltd. in one speech. It has attracted important private-sector Chinese investors to roll out its innovative water treatment technology in Canada. Bromley built its China connections and honed its investment pitch through participation in the annual mission to China of energy companies organized by CNOOC-Nexen.

This commitment by Chinese investors, helping to strengthen market players in the places they have invested, is a growing trend, rarely noticed by even the business media. The three CNOOC-Nexen missions to date have taken dozens of smaller Canadian energy firms to China. They meet many potential customers within CNOOC's powerful supplier networks – and they make deals.

Canadian companies need many tools in their "China toolbox" to win in the challenging Chinese market. Chinese investor mentors are a very powerful new tool. It adds to tools the Canadian Trade Commissioner Service and groups such as CCBC already provide.

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Mr. Trudeau also mentioned the agreement by China's Bohong Group to establish an auto engineering lab at the University of Windsor. Bohong purchased parts maker Wescast Industries in 2013 to build a stronger international platform as one company. Despite suspicions that the Brantford, Ont.-based Wescast would soon disappear, the company remains a strong local employer with its own brand and operations. The funding of a new research lab demonstrates Bohong's ongoing commitment to Wescast and to Canada.

Zongshen Industrial Group, a Chongqing engine manufacturer, last year bought 49 per cent of B.C.'s Harbour Air. Like Bohong, Zongshen wants to export Harbour Air's successful business model and operational experience to China and southeast Asia. Even more importantly for Canadian industry, Zongshen would like to use Canadian technology, equipment and expertise in an engine plant it is building in Pakistan.

As the Prime Minister said to the CCBC gala dinner, in front of nearly 800 Canadian and Chinese business and political leaders, the "drive to do a little better and to be a little better" is a commitment on both sides. "That means more better-paying jobs for Canadians, and when Canadian companies partner with Chinese companies, it means more and better-paying jobs here in China as well."

This visit highlighted one old truth and one new one. Canada has always been a champion of rule of law, contract compliance, social and human rights with its Asian partners – including China. On this visit, Mr. Trudeau returned to the tradition of frank and candid private discussion, and respectful public discourse.

What's new is that Canada/China partnerships in research and with small business and the simultaneous growth of businesses in each country offer a wide range of new opportunities for Canadian companies and Canadian jobs.

Now our challenge is to keep up the new momentum this visit has created.

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