Chinese interest in Canadian markets increasing
Private enterprises attracted to Canadian access to technology, the US and dynamic work force
VANCOUVER—China’s growing number of private enterprises are showing increased interest in making investments in Canadian companies beyond the resources sector, according to a new report by the Asia Pacific Foundation of Canada (APF Canada).
The report China Goes Global 2010 was launched during a workshop on Chinese investments at Simon Fraser University’s Segal Graduate School of Business in Vancouver, B.C. It indicates that Chinese firms consider Canada’s economy increasingly attractive.
About 78 per cent of the Chinese companies surveyed are in manufacturing. Close to half of them showed a strong interest in making capital investments in Canada’s manufacturing sector.
The study suggests that non-state owned Chinese enterprises are attracted to Canada because of its technology, market access to the U.S and dynamic labour force, said APF Canada President and CEO, Yeun Pau Woo.
About eight per cent of the 1,388 firms surveyed reported intentions to invest in Canada over the next three years. Investments averaged about $16.1 million. More than half the companies with Canadian investment intentions said they will enter North America by establishing their own sales channels. Another 26 per cent indicated they would enter via joint ventures and mergers and acquisitions.
Woo added that all signs point to rapid growth in Chinese investment. The question is, however, whether or not Canadians will be receptive to Chinese capital. The report said Chinese firms will continue to face concerns from North American companies over issues like managerial competence. Other challenges include finding Canadian partners and lacking knowledge of Canadian legal and market risks.
APF Canada is confident, however, that these barriers are not insurmountable, said Kenny Zhang, Senior Research Analyst at APF Canada. He noted that there is a role for government, industry associations, investment promotion agencies and professional services that could help to alleviate barriers to Chinese investments.