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Transcript of Creating Winning Conditions: Michael Holden | Canada West Foundation | May 2011 What governments can...
Creating Winning Conditions:
Michael Holden | Canada West Foundation | May 2011
What governments can do to advance economic relations with China and India
Presentation Overview
1. Current State of Trade and Investment
2. Recent Policy Initiatives
3. Additional Policy Considerations
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
-5
0
5
10
15 12.9 14.0
3.6
-3.9
7.78.5
3.5
0.5
-1.1
3.5
Average Annual Growth in Merchandise Trade
(2005-2010)Exports
Imports
%
Canada’s trade relationship with China and India is expanding rapidly…
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Source: CWF calculations using Statistics Canada data
-202468
10
5.3
8.4
2.8
-0.2
3.4
Average Annual Growth in Merchandise Trade
(2005-2010)Exports
Imports
%
…as is Alberta’s.
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Source: CWF calculations using Statistics Canada data
China is a far more significant trading partner, both nationally…
0
2
4
6
8
10
12Canadian Trade with China and India
Exports to ChinaImports from ChinaExports to IndiaImports from India
17.5% of western Canada’s exports in 2009.
2010 Trade
To China:
Exports: $13.2 bImports: $44.5 b
To India:
Exports: $2.1 bImports: $2.1 b
Source: CWF calculations using Statistics Canada data
as a % of total trade worldwide
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
…and provincially.
Source: CWF calculations using Statistics Canada data
ChinaJapan
S. KoreaAustralia
TaiwanSingaporeIndonesia
BangladeshHong Kong
PakistanSri Lanka
New ZealandIndia
Alberta’s Exports to Major Asia-Pacific Destin-ations, 2010
$2.79 billion
$150 million
$165 million
$184 million
$293 million
$547 million
$1.48 billion
$108 million
$140 million
$70.9 mil-lion
$72.1 mil-lion
$86.2 mil-lion
$141 million
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Even in China, however, Canada is running to stand still.
Source: CWF calculations using data from the National Bureau of Statistics of China and the Indian Department of Commerce
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090.00.20.40.60.81.01.21.41.61.8
Chinese and Indian Imports from Canada(as a % of total imports)
IndiaChina
%
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Both China and India are emerging as major sources of FDI into Canada.
02,0004,0006,0008,000
10,00012,00014,00016,000
Foreign Direct Investment in Canada
China
India
$ billions
FDI into Canada (2010):
China:
• Total FDI: $14.1 billion
• 7th-largest source of FDI into Canada
India:
• Total FDI: $6.6 billion
• 11th-largest source of FDI into Canada
Source: Statistics Canada
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Presentation Overview
1. Current State of Trade and Investment
2. Recent Policy Initiatives
3. Additional Policy Considerations
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Federal Government Initiatives:
1. Global Commerce Strategy
China and India identified as priority markets
DFAIT: China and India “present enormous business opportunities and…are key links to global value chains.”
India Engagement Strategy
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Federal Government Initiatives:
2. Key initiatives/developments:
Free trade negotiations with India (November 2010) Canada granted Approved Destination Status by
China (2010)
Canada-China Science and Technology Agreement (2007)
BIT agreement with India (completed June 2007) Canada-India Science and Technology Agreement
(2005) BIT negotiations with China (ongoing since 2004) Asia-Pacific Gateway and Corridor InitiativeCreating Winning Conditions: What governments can do to advance economic relations with China and India | Michael
Holden | May 2011
Provincial Government Initiatives:
1. Fewer policy tools available for provincial governments
Power to sign international treaties falls under federal jurisdiction
2. Key initiatives/developments:
Frequent government-led trade missions Establishment of overseas offices New West Partnership: AB, BC, SK to cooperate
on trade and investment developmentCreating Winning Conditions: What governments can do to advance economic relations with China and India | Michael
Holden | May 2011
Presentation Overview
1. Current State of Trade and Investment
2. Recent Policy Initiatives
3. Additional Policy Considerations
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Federal Government:
1. Sustained policy commitment and focus are required
Global Commerce Strategy: 13 “priority markets” include more than 90 countries
Consistent and adequate funding Will a majority government improve policy
efforts?
2. Domestic transportation issues need to be addressed
Are APGCI investments sufficient? West coast pipeline issues and related energy
policies
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Federal Government:
3. Foreign direct investment rules need to be clarified
China and India are becoming major investors in energy and other “strategic” Canadian assets
Concerns over foreign (state-owned) control of Canadian resources
Recent high-profile rejections call into question the transparency and predictability of the investment review process Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael
Holden | May 2011
Federal/Provincial Governments:
1. Improve government engagement and visibility overseas
Commercial relations and government-to-government ties are closely connected in many Asia-Pacific markets
Frequent visits by government leaders send an important signal about their commitment to building commercial ties
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Provincial Government:
1. Continue cooperative efforts through the New West Partnership
Helps to ensure consistency of messaging Presents a united front overseas Better use of available resources and market
intelligence
2. Develop education- and tourism-specific strategies
Service sector opportunities should not be overlooked
Canada has lagged Australia and others in exploiting opportunities in education services
ADS could be a boon to Alberta
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011
Final Thoughts:
1. China and India hold enormous market potential for Alberta and Canada
2. Many policy options for improving economic ties with China and India
3. Most important determinant of success is a sustained and concerted policy effort
Creating Winning Conditions: What governments can do to advance economic relations with China and India | Michael Holden | May 2011