Chinese President Hu Jintao's recent visit to Vancouver shows that B.C.'s "gateway" strategy is working, says the head of the Asia Pacific Foundation.

"You can't point out a specific business outcome, but the level of significance is extremely important in China because it could put B.C. and the rest of Canada on their mental map," says Yuen Pau Woo, president and co-CEO of the independent thinktank, which aims to develop closer trade links between Canada and the Asia-Pacific region.

The province's Asia-Pacific gateway strategy includes an Asia-Pacific Trade Council to advise the government on where and how best to target resources, a network of B.C. trade and cultural centres designed to promote B.C. products in key international markets, a new competition council to review the province's competitiveness and the development of new tourism products to coincide with Canada's expectation of earning approved destination status with China.

The strategy also addresses new and expanded transportation links to the Pacific through the ports of Vancouver and Prince Rupert, as well as cruise ship facilities along the coast.

Bayne Stanley, Business Edge
Asia Pacific Foundation president Yuen Pau Woo says Hu Jintao's recent trip shows B.C.'s gateway strategy is working.

British Columbians of Chinese descent are also expected to play an important role in fostering a closer trade relationship through family and other ties to China.

Hu and Prime Minister Paul Martin reiterated the importance of the strategy during the Chinese president's 24-hour stopover in Vancouver last week, en route to Beijing after visiting Ontario and the U.S.

"That (spirit of co-operation) was a very big message that was reinforced on the Chinese side and also on the Canadian side," says Woo.

He says Canada is more prepared than the U.S. when it comes to developing trade with China because, for political and economic reasons, Washington can't be perceived as co-operating with the Communist country.

"We have clearly taken a different approach in our relationship with China than the U.S. could," says Woo.

Hu was jeered and cheered by protesters wherever he went in Vancouver. Most protesters denounced China's human rights records, its refusal to grant Tibet independence, its outlawing of the Falun Gong spiritual movement and its increasing influence in Taiwan.

But other demonstrators, who called themselves greeters (as evidenced by red tags they wore around their necks) effectively protested against the protesters as they waved Chinese flags and welcome signs in support of Hu.

Similar scenes played at the Pan Pacific hotel as Hu was the guest of honour at a private dinner hosted by federal Industry Minister David Emerson and business leaders.

However, Woo does not believe protest efforts will hamper Canada-China trade initiatives. He calls the activities "a demonstration of Canada's respect for peaceful protests.”

Although the Chinese don't like criticism, he says, they have a healthy respect for the Canadians' right to demonstrate.

Woo says industry opposition to Canada-China trade in Ontario and Quebec poses more of a risk than increased protests. For example, the Canadian auto parts and technology industries have concerns about China's growth in those sectors, although they do not currently compete with China.

Meanwhile, Western Canadian business leaders called for increased trade between the two countries.

"(Hu's visit) raised awareness that China is very important," says Peter Briscoe, president of Convedia, a Vancouver-based telecommunications company, who attended a luncheon that Martin hosted for Hu at the Westin Bayshore hotel.

"Canada needs to make good relationships with China if we want to have a chance to sell what's in their country."

Briscoe, whose firm manufactures network infrastructure and does 40 per cent of its business in China, says criticisms against China are valid - "there's no doubt about it" - but every country in the world has problems.

"China's got a unique problem," says Briscoe. "They're trying to move 1.3 billion people from the Dark Ages into the Modern Era as fast as they can, so there's definitely some problems."

He adds Canada must promote its business acumen in China and show it can do more than provide natural resources.

"Canada is such a small country economically compared to China that we're not even known by most of the business people ... As a country, we should try to sell finished goods - not just natural resources," says Briscoe.

Before and after the prime minister's luncheon, protesters chanted such phrases as "Human rights for everyone!" and "Stop the killing!" and "One China, one Taiwan!" A couple of panel trucks with the phrase "New China will be born when CCP is gone" circled the hotel and others carried placards calling for "human rights before trade."

Sonam, a Tibet-born tutor who now lives in Vancouver and declined to give his last name for fear of repercussions against Tibetans, says increased trade between Canada and China is good as long as it doesn't undermine human rights.

"The trade and economic power are for our happiness, for our (betterment)," says Sonam. "If you don't have the basic human rights, what is the point of doing business?" Meb Pirani, whose Pirani Group of Companies owns five Vancouver hotel franchises and is contemplating building hotels in China, says that country won't change over night.

"I think that China is liberalizing in their own timeframe, and it will take a while before they accede to some of the viewpoints that (protesters) want," says Pirani.

Marc Broadbent of Hypor, a Regina-based hog breeder that already sells to China, says the luncheon created excitement and momentum for developing business opportunities there.

A decade ago, he says, China was a very difficult place to work, but economic and regulatory changes mean it's easier to do business there now.

Hanson Lau, owner of Richmond-based Hanson Travel, calls Hu's trip a goodwill visit that will open trade channels.

Lau moved to Canada with his parents from their native Hong Kong in 1966 after his parents witnessed the first "bank rush" where people lined up to withdraw their money because of concerns about seizures from the Chinese government.

In 1985, he vowed never to return to China but changed his attitude in 1996 - the year before Hong King reverted to being a part of China rather than a British Colony - because of changes that led to increased freedoms and economic opportunities.

"The conventional press, they harp away on human rights," says Yau. "They don't report - or don't see - the growing economic change, which is, really, very revolutionary - changing the lifestyle and the life of the people."

Michael Walker, executive director of the Fraser Institute, a Vancouver-based think tank, welcomed the Chinese leader's visit.

"It's important that they're being more outward-looking, that they're making more of an effort to reach out to other countries," Walker says. "It's important to bring a dialogue about human rights in the country."

Walker made the comments following a lecture on China's regional economic disparity by Ding Lu, a Chinese-born professor and author now based in Japan. During a speech at the Fraser Institute last week, Lu told business leaders and academics that the development of local markets within China will be the key to future increases in economic growth and foreign investment.

Lu added China can't wait for the free flow of capital and labour to improve its economy. The country needs natural resource projects, infrastructure, telecommunications technology and vocational training programs.

Walker suggests infrastructure and increased property rights will be the biggest forces behind China's economic growth. "Private initiatives are what have to drive economic development," he says.

Lu had planned to return to China after completing his doctorate in the U.S., but following the Tiananmen Square massacre in 1989 he went to Singapore for 13 years before moving to Japan's Sophia University a few months ago.

He said China has made great progress in its economic "equalization" and moves toward a market economy over the past two decades, but the country still has regional economic disparities that it cannot easily overcome.

According to a joint survey released earlier this month by the Asia Pacific Foundation and the Beijing-based China Council for the Promotion of International Trade, only four per cent of Chinese companies currently have investment projects in Canada while just 8.4 per cent are considering the possibility of investing here.

But 23 per cent of the 296 Chinese firms surveyed intend to increase their outward direct investment within the next year and more than 40 per cent plan to invest overseas within two to five years.

Companies in the automotive, food and beverage, and mechanical and electrical industries are the most likely to invest overseas.

"I don't think there's going to be any immediate earth-shattering effect (from Hu's visit)," says Laura Jones, vice-president of the B.C. and Yukon regions for the Canadian Federation of Independent Business (CFIB). "It strengthens the relationship. It shows the importance of the relationship, and trade with China is increasingly important to Canadian business and Canadian small business."

The CFIB is actively encouraging Chinese-speaking business owners to join the federation so that they can have a voice in political debates.

"One of the fastest ways to improve human rights and environmental and other concerns is through a strong economy," says Jones.

(Monte Stewart can be reached at monte@businessedge.ca)