Chinese Companies Ready for Canadian Investment

%3CFONT%20face%3DVerdana%3ENearly%20eight%20percent%20of%20Chinese%20companies%20are%20intending%20to%20invest%20in%20Canada%20within%20the%20next%20three%20years%2C%20according%20to%20a%20survey%20released%20Monday%2C%20with%20about%20half%20of%20those%20polled%20expressing%20an%20interest%20in%20the%20North%20American%20manufacturing%20sector.%3CBR%3EIn%20the%20report%20%22China%20Goes%20Global%202011%22%20conducted%20by%20the%20China%20Council%20for%20the%20Promotion%20of%20International%20Trade%20presented%20by%20the%20Vancouver-based%20Asia%20Pacific%20Foundation%20of%20Canada%2C%20the%20survey%20sent%20out%203%2C000%20questionnaires%20between%20December%202009%20and%20March%202010%20to%20small-%20and%20medium-sized%20companies%20to%20ask%20their%20response%20to%20China%27s%20Going%20Global%20policy%20which%20encourages%20its%20domestic%20firms%20to%20look%20outward.%3CBR%3EIn%20total%2C%201%2C377%20companies%20replied%2C%20a%2046%20percent%20response%20rate.%20The%20companies%2C%20with%20experience%20in%20import%20and%20export%20activities%2C%20were%20asked%20about%20their%20intentions%20and%20the%20challenges%20facing%20enterprises%20in%20their%20overseas%20investments.%3CBR%3EA%20key%20finding%20was%20that%20the%20Canadian%20economy%20was%20one%20of%20the%20%u201Cmost%20open%22%20toward%20Chinese%20outward%20foreign%20direct%20investment%2C%20ranking%20equal%20fourth%20with%20Singapore%20among%20the%2029%20destinations%20listed.%20Hong%20Kong%20and%20Macao%20held%20the%20top%20two%20spots%2C%20followed%20by%20the%20United%20States.%3CBR%3EThe%20data%20indicated%20investment%20in%20Canada%20provided%20an%20ideal%20gateway%20for%20Chinese%20companies%20into%20North%20America%2C%20particularly%20the%20huge%20American%20market.%20About%2049%20percent%20expressed%20interest%20in%20the%20manufacturing%20sector%2C%20followed%20by%20hospitality%20%2814%20percent%29%2C%20wholesale%20and%20retail%20shops%20%2814%20percent%29%20and%20finance%20%2813%20percent%29.%3CBR%3EYuen%20Pau%20Woo%2C%20president%20and%20CEO%20of%20the%20Asia%20Pacific%20Foundation%20of%20Canada%2C%20said%20the%20significance%20of%20the%20findings%20was%20that%20Canada%20was%20%22on%20the%20radar%20screen%20of%20Chinese%20investors%22%2C%20ranked%20ahead%20of%20such%20places%20as%20Germany%2C%20Australia%2C%20Britain%2C%20South%20America%20and%20Africa.%3CBR%3EOf%20the%2084%20Chinese%20companies%20planning%20to%20invest%20in%20Canada%20-%2050%20percent%20indicating%20they%20are%20small-%20or%20medium-sized%20companies%20and%2023%20per%20cent%20large%20companies%20%28the%20others%20didn%27t%20indicate%20their%20size%29%20-%20the%20mean%20intended%20investment%20abroad%20is%2016.1%20million%20U.S.%20dollars.%3CBR%3E%22The%20fact%20is%20the%20pool%20of%20potential%20investment%20is%20so%20large%20that%20you%20only%20need%20to%20capture%20a%20relatively%20small%20percentage%20of%20that%20investment%20to%20reap%20the%20benefits%2C%22%20Yuen%20said.%20%22The%20key%20is%20to%20be%20under%20consideration%20for%20investment.%22%3CBR%3EHe%20added%20Chinese%20companies%20were%20looking%20for%20access%20to%20technology%2C%20and%20a%20diversified%20and%20dynamic%20labor%20force.%20Yuen%20tipped%20telecoms%20and%20auto%20parts%20as%20two%20sectors%20that%20could%20receive%20investment.%3CBR%3ELast%20year%2C%20Shenzhen-based%20telecom%20network%20giant%20Huawei%20invested%2050%20million%20Canadian%20dollars%20in%20a%20research%20and%20development%20center%20in%20Ottawa%20with%20Bell%2C%20while%20the%20Toronto-based%20Public%20Mobile%20is%20in%20partnership%20with%20telecom%20equipment%20provider%20ZTE%20to%20build%20a%20wireless%20network%20stretching%20from%20Ontario%20to%20Quebec.%20The%20350%20million%20Canadian%20dollar%20project%20is%20being%20financed%20by%20the%20Export-%20Import%20Bank%20of%20China.%3CBR%3ELast%20week%2C%20providing%20perhaps%20the%20strongest%20indicator%20of%20the%20interest%20in%20Canada%2C%20the%20state-run%20China%20Investment%20Corp%20opened%20a%20Toronto%20office%2C%20signaling%20it%20is%20planning%20to%20invest%20some%20of%20its%20300-%20billion-dollar%20Sovereign%20Wealth%20Fund%20into%20the%20resource-rich%20country.%3CBR%3E%22Clearly%20they%20%28China%29%20see%20assets%20in%20Canada%20that%20go%20beyond%20market%20access.%20I%20would%20say%20also%20that%20much%20of%20the%20investment%20is%20likely%20to%20help%20Chinese%20manufacturers%20move%20up%20the%20value%20chain%2C%22%20Yuen%20said.%3CBR%3E%22So%20they%20are%20not%20looking%20for%20cheap%20labor%20that%20they%20could%20get%20in%20Thailand%20or%20the%20Philippines%20or%20African%20countries%2C%20but%20they%20are%20looking%20for%20technological%20and%20management%20and%20marketing%20expertise%20that%20will%20allow%20them%20to%20be%20global%20companies.%22%3CBR%3EAbout%2056%20percent%20of%20the%20respondents%20said%20they%20wanted%20to%20set%20up%20their%20own%20sales%20channels%2C%20while%2022%20percent%20indicated%20they%20would%20enter%20the%20market%20through%20joint-ventures.%20Twelve%20percent%20of%20the%20companies%20would%20gain%20access%20through%20mergers%20and%20acquisitions%2C%20and%2010%20percent%20planned%20to%20set%20up%20wholly-owned%20manufacturing%20companies.%3CBR%3EOf%20the%20barriers%20facing%20Chinese%20companies%20in%20their%20North%20American%20investment%20were%20a%20lack%20of%20managerial%20competence%2C%20difficulty%20in%20identifying%20business%20partners%20and%20a%20lack%20of%20knowledge%20about%20legal%20and%20market%20risks%20in%20Canada.%3CBR%3E%22The%20barriers%20Chinese%20enterprises%20face%20are%20not%20insurmountable%2C%22%20said%20Kenny%20Zhang%2C%20the%20Asia%20Pacific%20Foundation%27s%20senior%20research%20analyst.%20%22There%20is%20a%20role%20for%20government%2C%20industry%20association%2C%20investment%20promotion%20agencies%20and%20professional%20service%20firms%20to%20reduce%20the%20barriers%20to%20Chinese%20investment%20in%20Canada.%22%3CBR%3E%3C/FONT%3E