Ottawa Looks to Get a Jump on Opportunities in World’s Fastest-Growing Economy

A lot has happened since Ottawa established a sister-city relationship with Beijing back in 1999.

The recently ratified Foreign Investment Promotion and Protection Agreement is just one example. The deal, signed in 2012, is a bilateral pact designed to encourage more foreign investment between Canada and China.

“FIPA opens the door to more opportunities for Canadian companies to get Chinese investment,” says Sophie Chen, Invest Ottawa’s senior business development manager for the China market. “So that’s definitely great news for our local companies.”

Invest Ottawa, the city’s main economic development agency, has been actively promoting opportunities with China in the National Capital Region by doing seminars, bringing in business delegations from the country and organizing trade missions.

While some investment and trade is state-sponsored, “private wealth in China is becoming much more commonly understood,” says Invest Ottawa CEO Bruce Lazenby.

There are more millionaires and billionaires in China than any other country in the world, he says, adding a lot of those people are looking to invest outside of their homeland. “We need to make those connections and help them find opportunities here in Ottawa,” he says.

As well, China is the fastest-growing economy in the world and its consumer class has grown significantly, he adds.

“We’re talking several hundred million in the mid-market,” says Mr. Lazenby. “They want to buy stuff, and they have a lot of respect for western goods. It’s a big market opportunity. Companies that focus on it are going to find themselves with fewer competitors in that space because not everybody is looking at China.”

Ottawa has some particularly strong sectors that match well with China’s interests for both trade and investment.

“For example, we have life sciences, particularly medical devices. Last year, we landed the biggest Centre of Excellence in the country focusing on medical devices,” says Ms. Chen. “China is going through a health-care reform process and they have a big demand for more innovative technologies from the medical area.”

Another big need facing China is finding solutions to its air and water quality problems.

“I think Canada is extremely well-positioned to offer some of its technologies in areas like water treatment, water supply and air pollution, as well as bio-mass energy,” says Mark Bolger, chief representative for Asia at Export Development Canada. “These are all things Ottawa-based companies are actively involved in.”

Mr. Bolger also points to Ottawa’s information and communications technologies sector as an area of strength.

“China has evolved from just being a straightforward manufacturer of goods for the world to really moving its economy upscale,” he says. “They don’t need the basic technology anymore. What they’re looking for are things that improve operational efficiencies, that analyze big data, and embedded technologies.”

To fuel high-tech connections, Invest Ottawa has partnered with Zhongguancun Development Group in what is Canada’s first China-backed tech incubation centre.

“The goal is to build a platform for Canada and China to encourage more trade and investment opportunities,” says Ms. Chen.

Companies accepted into the incubator are given space and resources as well as introductions to the Chinese market.

“Almost anywhere in Asia, and China included, relationship is what drives business and what gets deals done,” says Mr. Bolger. “You need to get over there, get introductions and referrals, have an executive presence on the ground, and show your company is committed to doing business.”

But before heading over to China, firms need to do their homework. Like Invest Ottawa, the Canadian Trade Commissioner Service offers guidance on how to access the Chinese market and advice on the best prospects to go after.

EDC also has significant regional expertise and can help businesses doing deals abroad with financing as well as risk mitigation services.

Mr. Bolger also recommends finding a lawyer who understands the China market because there are distinct differences in how business is negotiated there. It’s also important for businesses to know how to protect themselves, both in terms of contract terms and intellectual property.

Creating an overseas business relationship has its complexities, but experts agree the market opportunity for both trade and investment appears to be massive.

“In a few years it will be impossible to ignore China. We’re trying to get ahead of that and build the relationships now,” says Mr. Lazenby. “So when the rest of the world wakes up and says we need to do something in China, we’re already there.”

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