November 7, 2014 / 4:43 AM / in 3 years

Canada businesses impatient for China growth as Harper promotes trade ties

HANGZHOU, China, Nov 7 (Reuters) - Canadian Prime Minister Stephen Harper kicked off his trade mission to China on Friday facing criticism from businesses that the troubled diplomatic relationship between the two nations has hampered their efforts to tap China’s burgeoning market.

Harper, on his first visit to China in two years, announced the opening of four new trade offices in the cities of Hangzhou, Xian, Xiamen and Tianjin to help the entry of Canadian businesses into the fastest growing regions of China.

The trip is Harper’s third to China since he took office in 2006. But as he kicked off a conference bringing together Chinese and Canadian executives looking to do business with each other, some Canadian executives said political and economic irritants between the two countries have made it hard to keep pace with competitors in other countries.

“Any time there are those geopolitical things that are beyond the control of the businessman ... it slows things down big time,” said David Curtis, president and CEO of Viking Air Ltd, a British Columbia-based company that makes small seaplanes.

Curtis said China, with hundreds of cities near waterways, offers a “huge” opportunity for his company, but he has been stymied by slow progress trying to get the company’s Twin Otter seaplane certified in China - though it is already certified in 75 other countries.

He said other nations appear to understand that government-to-government interaction is especially important in China, while Canada neglects the relationship.

“You can bet our colleagues to the south in the United States, in France, in Brazil, their political leaders - whether mayors or the prime minister or the president - are talking aerospace, and it is so important. We need to have our products front and center, and the politicians talking about it,” he said.

China is Canada’s second-largest trading partner after the United States. In 2013, two-way merchandise trade between the countries reached C$73.2 billion ($64 billion), accounting for 7.7 per cent of Canada’s total merchandise trade.

Canadian Trade Minister Ed Fast, who has accompanied Harper on the visit, said Canadian businesses were partly to blame for their slow progress into China.

“Canadians tend to be quite cautious, we tend to be risk-averse. It takes quite something to push Canadian companies over the line to look at markets beyond North America, and it is my role as trade minister to do that,” Fast told the business delegates at the conference in eastern Chinese city of Hangzhou.

Since taking power in early 2006, Canada’s right-leaning Conservatives have adopted an inconsistent policy on China, reflecting splits between pro-business members and social conservatives who are suspicious of Beijing.

Relations between the two nations soured dramatically in July after Canada accused Chinese hackers of breaking into a key computer network, the first time it has ever singled out China for such a security breach. Beijing dismissed the allegations as “irresponsible.”

Less than a week later, Chinese authorities detained an expatriate Canadian couple, Kevin and Julia Garratt, for suspected theft of military and intelligence information and for threatening national security. The couple, long time residents of China, operated a coffee shop near the North Korean border.

Another Canadian executive taking part in the bilateral meetings said Canada should stay out of Chinese politics.

“I think (problems) can get blown out of proportion. They can be easily fixed if people are talking, they are not easily fixed if you don’t talk,” said Guy Nelson, chief executive at Empire Industries Ltd, a Toronto-based maker of amusement park rides, among other mechanical and structural installations.

Nelson sees China as a huge opportunity for his company, noting theme parks planned by Walt Disney Co and Universal Studios in China, but said bumpy relations between the two countries hurt business.

“Canada has to not try to impose our values excessively on this country,” he told reporters on the sidelines of the business conference.

“How China chooses to run its country is their business. We can as friends advise from time to time, but you can’t advise your friends if you’re not talking. So it is better to be engaged.” (1 US dollar = 1.1439 Canadian dollar) (Additional reporting by David Ljunggren and Randall Palmer in Ottawa; Editing by Ken Wills, Peter Galloway and James Dalgleish)

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