Ventures Dialogue

The Ontario Chamber of Commerce (OCC) just returned from their first trade mission to Hong Kong. The mission leader was the OCC’s very own President and CEO Len Crispino. Organized in partnership with the Hong Kong Trade Development Council (HKTDC), Consulate General of Canada in Hong Kong, and the Hong Kong-Canada Business Association (HKCBA), the mission focused on the life sciences and neutraceuticals sectors.

In total, nine Ontario companies were showcased ranging from a manufacturer of vitamin D supplements, a company specializing in needle free acupuncture and nanometer technology, to manufacturers of natural health supplements including natural and herbal varieties. The mission began with a briefing, networking reception and luncheon that seamlessly transformed into one-on-one business matching sessions. Later that day, the mission delegates had an opportunity to connect with interested parties on Mainland China though a virtual trade mission organized by the Canadian consulate general in Hong Kong. Mission delegates spoke directly with people in Beijing, Shanghai, Nanjing, Chongqing, and Shenzhen. The mission also included another networking luncheon at the China Club (the Old Bank of

China Building, a venue which has a history all its own).
From the OCC’s standpoint, we felt this is just the beginning of getting directly involved with bringing Ontario companies to global arenas. We are pleased to see Ontario businesses getting out there and seeking new export markets. Our funding program Export Market Access (EMA) also had a presence as some companies benefited from our funding to attend the mission. In case you are not aware, EMA is a 50/50 grant program assisting companies with their goals to export.

All in all, the mission was a success. The most important takeaways are that if you are going on a trade mission, no matter who is the organizing it, as a business you must do your own research, line up some meetings on your own, take advantage of every opportunity to network and showcase your company, its products and what makes them unique.

“Southeast Asia has emerged resilient in the midst of the global economic crisis. Many of the region’s countries are fertile ground for new investment, whether in infrastructure, retail or as an alternative production base.”

Read further and find out what  how Loretta Wan, Hong Kong Trade Development Council’s Regional Director for Southeast Asia sums up this region and more, in six questions in the latest release: ASEAN’s Rising Stars.

China is gaining increasing influence on the global economy and it is time for Hong Kong and Canada to strengthen co-operation by collaborating and complementing each other to make the most of these opportunities, the Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, Professor K C Chan, said in Toronto on March 8 at a mining convention.

Speaking at a seminar on “Listing and Capital Raising in Hong Kong for Mining and Natural Resources Companies” of the Prospectors and Developers Association of Canada Convention (PDAC 2010), Professor Chan said Hong Kong could serve as the financial gateway for Canadian companies to reach the Asian market in the same way that Canada served as a gateway for Hong Kong companies to invest in the North American market.
 
He called on Canadian companies to consider listing in Hong Kong to tap the local liquidity pool, quoting the examples of British Columbia and Ontario of Canada which are overseas jurisdictions already accepted by the Hong Kong Exchanges and Clearing Limited (HKEx).

“At the same time, companies listed in Hong Kong and other Asian markets can also consider a listing on the Canadian exchange to tap the liquidity there. We would also welcome Canadian fund management companies to market their services to Asia through Hong Kong,” he added.
     
Turning to market regulation, he said Hong Kong believed in being predictable and consistent in regulation, and had been careful in striking a balance between the goals of having a quality market and being market friendly.

Using the HKEx as an illustration, he said listing decisions were made by a committee of market professionals who applied their expertise in reviewing listing applications in a dual filing system overseen by the securities regulator.

He described such regulatory environment in the listing process as  working well.  “The HKEx has full control over its development strategy, and it has responded to market needs. The efficiency and quality of the listing process are further ensured with the regulatory oversight,” he added.

In 2009, Hong Kong was the most active market for IPO funds raised globally.  Hong Kong ranked number one globally in IPO fund raised for 2009 (US$31.3 billion), and number four in the world in 2009 in terms of total fund raised (including post-IPO) of US$81.4 billion.  A total of 73 companies were newly listed on HKEx and they included overseas companies which have listed their Greater China related business operations in Hong Kong.

“Earlier this year, we saw the first Russian company listed on our stock market, and I am confident that more foreign based companies will be looking to list on the Hong Kong stock exchange in the near future,” he added.

In the afternoon, Professor Chan also spoke at the Rotman School of Management, University of Toronto, on “China’s Rise as an Economic Power – Implications for HK, Canada and the Rest of the World”.

He told his audience that the new wave of financial globalisation has brought a new wave of financial talent to Asia, and to Hong Kong, and that as countries in the West continued to grapple with the aftermath of the financial tsunami, Asia was rebuilding, refocusing and rebounding. 

He said financial and trade experts not only looked to Hong Kong for future growth potential these days, they were also based right in Hong Kong which was a vantage point and actually the best available platform for seeking out the best opportunities in China and throughout Asia.

For the first time since 1975, Canada posted an annual trade deficit in 2009 as imports grew at a greater rate than exports.  Commentary on the implications of this news are mixed. 

CBC’s Michael Hlinka said in his broadcast this morning that it is a sign of a whole different environment for doing business.  In the past, Canadian exports were protected by a weaker Canadian dollar, giving our companies a competitive edge.  Hlinka argues that Canadian companies need to adapt to a new world where our dollar is almost at par with the American dollar.  They’ll have to find other ways to be competitive.

In the Montreal Gazette, an article argues that the growing trade deficit is a good thing since it shows that the right policy decisions were made to cushion Canada from a global recession.

And in the Toronto Star today, some promising facts that show our exports grew in December when compared to November, and that automotive products supplied much of that growth.

At the same time, the Ontario Chamber of Commerce has been trying to help small and medium sized companies in Ontario seize global opportunities for exports.  Through our Export Market Access program, we provide cost-sharing grants that cut a company’s costs of reaching new markets by half!  Support from the federal and provincial governments has enabled us to support over 220 companies since the launch of the program and we are eager to assist many more.

One thing is certain, as the global economy recovers, Ontario companies must be ready to seize opportunities overseas.  For too long we have been reliant on the United States market – an important market to be sure, but not the only one.  Canadians and our products are well regarded around the world.  Countries like China and India are growing at much greater rates, fueled in part by the growing middle class in these countries.  Ontario companies have excellent products and quality services that could be better marketed to the world.  It’s time we more aggressively pursued these opportunities.

The Ontario government has signed an agreement with a consortium led by Samsung C&T Corporation and the Korea Electric Power Corporation (KEPCO) to generate 2,500 megawatts of wind and solar power in the province.  According to the government, the $7 billion investment will lead to more than 16,000 new green energy jobs to build, install and operate the renewable generation projects and triple Ontario’s output from renewable wind and solar sources and provide clean electricity to more than 580,000 households.

A government media release identifies how the investment will benefit Ontario:

“The Korean consortium will also work with major partners to attract four manufacturing plants. This will lead to the creation of 1,440 manufacturing and related jobs building wind and solar technology for use in Ontario and export across North America.

The consortium fully intends to use Ontario-made steel in its renewable energy projects, such as constructing its wind turbine towers.

This is the single-largest investment in renewable energy in provincial history. The consortium chose Ontario because our Green Energy Act guarantees stable rates for renewable energy.”

Premier Dalton McGuinty states, “Thanks to today’s announcement, we will be delivering more green energy for Ontarians to use — and more green energy products for North America to buy. With this step, Ontario is becoming the place to be for green energy manufacturing in North America.”

Photo by JoshMcConnell

One of the outcomes of Canadian Prime Minister Stephen Harper’s trip to China and Hong Kong is the signing of a Memorandum of Understanding to mark the establishment of a bilateral working holiday arrangement to benefit young people of the two places from March 1, 2010.

The Memorandum was signed Saturday, following a meeting between Prime Minister Harper and Hong Kong’s Chief Executive Donald Tsang, at the Government House by Canada’s Minister of International Trade, Mr Stockwell Day, and Hong Kong’s Secretary for Labour and Welfare, Mr Matthew Cheung.
 
Canada is the sixth country and the first in North America to establish such bilateral arrangement with Hong Kong. The arrangement provides an opportunity for young people to broaden their horizons and to gain first-hand living and working experience while they are travelling.

“It is encouraging that Canada and Hong Kong has entered into this bilateral arrangement,” said Ms Maureen Siu, Director of the Hong Kong Economic & Trade Office, the representative of the Hong Kong SAR Government in Canada. “It will further strengthen our long-standing relations and make Canada a popular destination for our youngsters.”

The MOU will allow qualified young people aged 18 to 30 from Canada and Hong Kong to travel and take up employment in each other’s territory for up to one year.  There are 200 places available on each side for 2010 under the arrangement. Hong Kong established bilateral working holiday schemes with New Zealand and Australia in 2001, Ireland in 2005, and Germany and Japan in 2009.
 
So far, more than 9,450 Hong Kong youngsters have benefited from participating in the schemes while about 1,280 young people from New Zealand, Australia, Ireland and Germany have experienced Hong Kong’s cosmopolitan and vibrant way of life.
 
The Hong Kong Immigration Department or the Consulate General of Canada in Hong Kong will issue a working holiday visa to a successful applicant from Canada or Hong Kong respectively who meets the following eligibility criteria among others:
 
- The applicant must be either a Canadian citizen possessing a valid Canadian passport, or a HKSAR passport or British National (Overseas) passport holder ordinarily residing in Hong Kong, who is aged between 18 and 30 and intends primarily to holiday in Canada or Hong Kong for a specified period of not more than one year;

- The applicant must not be accompanied by dependent family members;

- The applicant must possess a departure ticket or sufficient funds to purchase such a ticket, and sufficient funds for his/her maintenance during the period of initial stay in Canada or Hong Kong; and

 The applicant must hold insurance for medical and health care for the duration of stay.
 
Details on visa application procedures for Hong Kong applicants can be found via the website of the Consulate General of Canada at www.hongkong.gc.ca.

Canadian applicants may contact the Hong Kong Immigration Department by telephone on 2824 6111 or download the necessary information from the Department’s website www.immd.gov.hk.

Foreign Affairs Minister Lawrence Cannon is midway through a visit to China, having just finished his visit to Beijing.  While there he met with both his Chinese Counterpart, Foreign Minister Yang Jiechi, and Chinese Vice President Xi Jinping. 

According to a government release, Cannon “noted that Canada wants a frank, friendly and forward-looking relationship with China, and that the upcoming 40th anniversary of bilateral relations offered an excellent opportunity to highlight Sino-Canadian ties.

Minister Yang expressed China’s appreciation for Canada’s assistance and support, and also reiterated China’s invitation to Prime Minister Harper to visit China at a mutually convenient time.”

Read the Government of Canada’s release here.  And an article in China View, an online Chinese publication here.

The Ontario Chamber of Commerce (OCC) is inviting all Ontarians to join in a grassroots movement to shift focus from today’s challenges to tomorrow’s potential by celebrating the advantages offered in the province.

Pointing to the many people who have come to Ontario from other parts of the world, to work or study, to invest, or to raise a family, the OCC has identified the various reasons why Ontario is a ‘magnet for the world’. 

It’s inviting all Ontarians to share their stories about Ontario on their website.  Stories are being gathered today in Toronto and at subsequent events throughout the province.

A grant to Ontario based Pillitteri Estates Winery, to study study the viability of icewine in China is now raising eyebrows here at home.

In 2006, Pillitteri received a $108,263 grant from the Canadian International Development Agency (CIDA).  Pillitteri, one of the largest producers of icewine in Canada, collaborated with Xingiang winery in Xinjiang and The Great Wall Winery in Beijing as part of its project.  From this, Pillitteri is soon to sell its icewine under the Xingiang Winery label.  Currently, Pillitteri’s icewine sales in China are around $1 million a year via six agents in the country. 

What has put the winery in the headlines lately, is that CIDA is currently undergoing an audit (and with it, some criticism as well) to determine if CIDA’s funding is going towards the right activities.  For example, one question raised is if its funding should be used in China at all.  Funds are intended to be used to help the poorest countries, and yet China is a quickly emerging powerhouse.   Another question is that are investments in alcohol and lingerie what CIDA should be funding?  Pillitteri, as well as a Montreal underwear and lingerie manufacturer that received $103,000, were two companies singled out in a recent article.    

Charles Pillitteri told the Canadian Press his project is successful and worthwhile as he is not only meeting, but exceeding the goals he set out to do.  His winery spent four times as much as his grant amount, and is set to go beyond his goal of creating 30 jobs in China. He also said he guided his Chinese partners on the hiring of women and other human rights issues.  In addition to this, Pillitteri is instructing his partners on how to make the icewine themselves. 

Since its creation in 1978, CIDA has given over $1 billion to Canadian companies for nearly 4,000 projects.  To date, 972 have been successful.  CIDA remarks that more than $10 billion were invested in “recipient” partner countries, and this in turn has increased the Canadian sales by $6 million.  CIDA’s 2006-2007 report is slated to be released in six weeks, and the auditors are still at work, but there remains questions in the minds of many.  So for now, judgment is left to the court of public opinion.

Photo by by dagmar61

I’m not the only Canadian who has just returned from Hong Kong.  Gerry Ritz, Minister of Agriculture and Agri-Food and his staff were also on my flight home Saturday.  As I mentioned last week, the minister was speaking to a business audience in Hong Kong on Thursday about Canada’s exemplary food safety record.  Later he signed an agreement-in-principle with Hong Kong to expand Canada’s beef exports.

Duncan Mavin of the National Post attended the Minister’s speech last week and spoke to the head of the Canadian Cattlemen’s Association.  Here’s an excerpt from his story:

The cattle chief also scents opportunity here in Asia’s street markets, where vendors boil and fry parts of the cow most Canadians won’t touch and all manner of offal hangs from the hooks in the butchers’ stores.

“People think of beef as steak cuts, but there are a lot of beef products other than that, some that we [in Canada] don’t even eat,” he [Brad Wildeman, President of the Canadian Cattlemen's Association] said.

In addition to there being no domestic market for some cuts, there are also other products, such as beef tongue, that are eaten at home but that fetch a much higher price in Asia — as much as $22 rather than $1.50 for tongue in Canada.

In all, if Canadian farmers could sell in Asia some products that might otherwise be tossed away or into the grinder, it would add another $100 or 10% to the value of each animal, Mr. Wildeman estimates.

As I’ve explained in other stories, Canadian food products are generally considered high quality and safe in Hong Kong.  Already some Canadian beef is on the shelves.  Growth in the Hong Kong market will definitely benefit Canadian producers, and with any luck, it will then open doors to other larger markets in the region.