Transcript www.chinachamber.ca

MEETING ASIA’S GROWTH NEEDS:
OPPORTUNITIES FOR ONTARIO
Yuen Pau Woo, President and CEO
Asia Pacific Foundation of Canada
Presentation to the
Asia Pacific Global Export Forum
Toronto, Ontario
September 23rd 2013
Warm Feelings of Countries and Regions by
Provincial Breakdown
Respondents from British Columbia express the warmest feelings toward Japan, while Northern Canadians are most receptive to China.
Not surprisingly respondents from Quebec rank France more positively compared to the rest of Canadians.
Warm / favourable rating (% of 8-10 on a scale of 10)
North*
BC
Alberta
SK
MB
Ontario
Quebec
Atlantic
Australia
63%
72%
75%
68%
67%
73%
52%
71%
United
Kingdom
53%
60%
61%
55%
55%
62%
36%
57%
United
States
62%
47%
50%
43%
51%
49%
45%
49%
Japan
39%
42%
31%
30%
23%
31%
28%
28%
France
36%
34%
32%
29%
28%
37%
52%
33%
Southeast
Asia
14%
15%
15%
15%
13%
13%
12%
15%
South Korea
30%
20%
16%
17%
13%
17%
11%
15%
India
27%
16%
14%
15%
11%
14%
13%
16%
China
27%
14%
10%
10%
10%
10%
10%
9%
*caution small base size in North n=50
Base:
Q.1
All respondents (n=3474)
Please rate your feelings towards some countries or regions, with ten meaning a very
warm, favourable feeling, one meaning a very cold, unfavourable feeling, and five
meaning not particularly warm or cold. You can use any number from one to ten: the
higher the number the more favourable your feelings are toward that country.
Denotes
statistically
significant
differences
among
provinces
Canada and the Asia Pacific Region by Provincial Breakdown
Northern Canadians and British Columbians are more likely to consider Canada to be part of the Asia Pacific Region in contrast to the
rest of Canada. Canadians who are 55 years of age or older, male and have incomes over $100k are also more inclined to identify
Canada with the Asia Pacific Region (27%, 25%, 25% respectively) although significantly less than last year (41%, 38%, 40%). Similarly,
despite being more likely than the rest of the country to think of Canada as being part of the Asia Pacific region, BC also led the
decline of this sentiment with an 18 point drop over last year.
% Agree
2012
I consider Canada to be part of the Asia Pacific region
Canada
18%
North*
SK
17%
Ontario
16%
66%
74%
Base:
Q.2
Disagree
12%
16%
Don’t know
All respondents: 2008 (n=1,058), 2010 (n=2903), 2011 (n=2926), 2012 (n=3129), 2013
(n=3474)
Do you agree or disagree with the following statement: “I consider Canada to be part of the
Asia Pacific region”?
55%
57%
30%
26%
(MB/SK
Combined)
14%
68%
Agree
15%
22%
72%
16%
11%
17%
61%
12%
*caution small base size in North n=50
3
65%
29%
3%
50%
19%
17%
Atlantic
51%
39%
MB
Quebec
13%
46%
BC
Alberta
68%
21%
25%
28%
Emphasis on Foreign Relations by Provincial Breakdown
Albertans are the most likely of all regions to think Canada should place the greatest emphasis on China, while India ranks highly
among Ontarians and British Columbians compared to the other provinces.
Top Two Countries
North*
BC
Alberta
SK
MB
Ontario
Quebec
Atlantic
China
39%
55%
64%
58%
47%
53%
54%
51%
Japan
51%
44%
46%
47%
50%
42%
47%
52%
India
22%
45%
33%
36%
31%
41%
33%
31%
Australia
63%
29%
35%
34%
42%
37%
36%
42%
South
Korea
2%
14%
12%
15%
17%
14%
14%
13%
Indonesia
15%
8%
3%
5%
7%
5%
6%
4%
Other
8%
5%
6%
5%
7%
7%
9%
8%
*caution small base size in North n=50
Base:
Q.4
4
All respondents (n=3474)
Which two of the following countries in Asia do you think Canada should place the greatest emphasis on in our
foreign relations with the region?
Denotes
statistically
significant
differences
among
provinces
Importance of Economic Relations by
Provincial Breakdown
In general, residents living in the Western provinces are more likely to agree that strengthening economic and political relations with
Asia should be Canada’s top foreign policy priority and believe that the growing economic powers in Asia represent an opportunity.
The growing importance of India as an economic power is more
of an opportunity than a threat
Strengthening economic and political relations with Asia should
be Canada's top foreign policy priority
The growing importance of China as an economic power is more
of an opportunity than a threat
*caution small base size in North n=50
Base:
Q.3
North*
BC
AB
SK
MB
ON
QC
Atl
% Agree
45%
61%
56%
58%
48%
56%
50%
47%
% Disagree
32%
30%
29%
30%
33%
32%
32%
34%
% Agree
54%
54%
60%
55%
47%
52%
45%
45%
% Disagree
43%
36%
28%
33%
38%
37%
35%
39%
% Agree
54%
48%
54%
50%
43%
48%
47%
36%
% Disagree
42%
45%
37%
40%
42%
45%
40%
46%
All respondents (n=3474)
Do you agree or disagree with each of the following statements about Canada’s relations with Asian countries.
Importance of Asia to Province’s Prosperity
- Regional Differences Would you say that Asia is important or not important
for your province’s prosperity?
Canada
33%
45%
North*
BC
AB
SK
MB
ON
QC
ATL
12%
18%
55%
9%
6%
28%
61%
47%
76%
11%
39%
39%
32%
57%
16%
54%
54%
44%
11%
36%
72%
52%
17%
(MB/SK
Combined)
57%
49%
13%
68%
81%
61%
8%
% Important
2012
33%
59%
Over half (55%) of Canadians believe Asia is
important to their province’s prosperity, down
six (6) points from last year. These numbers
are highest in BC (76%), Alberta (61%) and
Ontario (57%).
Changes in this perception in provinces
including Alberta (down 11 points), Quebec
(down 10 points) and Atlantic Canada (down
12 points) factor prominently in this year-overyear decline.
Canadians from Atlantic Canada are more
likely than other provinces to disagree that
Asia is important to their province’s prosperity
(54%).
45%
*caution small base size in North n=50
Not important
6
Don't know
Important
Base:
All respondents (n=3474)
Q11. Generally speaking, would you say that Asia is important or not important for your province’s prosperity?
Support for Provincial Government
Actions by Provincial Breakdown
Overall, British Columbians are most supportive of each of the actions their provincial government could take to build stronger ties
with Asia.
Encourage cultural exchanges through performing arts and other
exhibitions
Increase the number of student exchanges and university
agreements between your province and Asia
North*
BC
AB
SK
MB
ON
QC
Atl
% Agree
65%
79%
65%
64%
67%
75%
66%
65%
% Disagree
26%
16%
26%
27%
21%
18%
21%
21%
% Agree
66%
66%
56%
52%
59%
60%
58%
56%
% Disagree
26%
26%
33%
38%
31%
31%
27%
30%
% Agree
36%
58%
51%
53%
51%
57%
49%
42%
% Disagree
40%
31%
35%
33%
31%
30%
29%
39%
% Agree
61%
62%
51%
53%
47%
53%
37%
48%
% Disagree
32%
34%
40%
36%
42%
39%
45%
38%
% Agree
28%
43%
36%
25%
27%
31%
26%
29%
% Disagree
53%
51%
55%
65%
60%
61%
58%
57%
% Agree
38%
27%
26%
25%
22%
26%
35%
23%
% Disagree
54%
65%
65%
59%
62%
63%
45%
61%
Open provincial trade offices in Asia
Place more emphasis on teaching about Asia in your province's
education system (e.g. history, culture, etc.)
Place more emphasis on teaching Asian languages in your province's
schools
Give priority to investment from Asian countries in your province
*caution small base size in North n=50 Base:
All respondents (n=3474)
Q12. Would you support or oppose your provincial government doing each of the
following to build stronger ties with Asia?
Canada’s Top Export Markets, 2012
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Countries
United States (U.S.)
China
United Kingdom (U.K.)
Japan
Mexico
Netherlands
South Korea
Germany
France (incl. Monaco, French Antilles)
Brazil
India
Norway
Hong Kong
Belgium
Australia
Indonesia
All other countries
Canadian Dollars, 2012
317,183,593,837
19,036,100,475
18,083,651,922
10,219,027,901
4,868,016,268
4,300,198,364
3,656,316,088
3,283,434,987
2,950,807,705
2,452,275,545
2,290,811,102
2,287,078,895
2,256,431,839
2,213,203,872
1,849,176,104
1,631,115,186
28,687,803,504
Compiled by Asia Pacific Foundation of Canada; Source: Statistics Canada
% of all 2012
Exports
74.24%
4.46%
4.23%
2.39%
1.14%
1.01%
0.86%
0.77%
0.69%
0.57%
0.54%
0.54%
0.53%
0.52%
0.43%
0.38%
6.715%
Canada’s Top Ten Asian Export Markets
In Billions of CAD, 2012
20
18
16
14
12
10
8
6
4
2
0
China
Japan
South Korea
India
Hong Kong
Australia
Indonesia
Taiwan
Singapore
Compiled by Asia Pacific Foundation of Canada; Source: Statistics Canada
Malaysia
Canadian Exports to Asian Countries by
2008
2012
Proportion
All other
Countries
25%
All other
Countries
20%
China
26%
China
40%
Hong Kong
5%
Hong
Kong
4%
India
6%
South
Korea
10%
Japan
29%
India
5%
South
Korea
8%
Japan
22%
Compiled by Asia Pacific Foundation of Canada; Source: Industry Canada
Ontario’s Current Exposure to Fast-Growing Economies:
Export Market Opportunities
Notes: Bubbles represent destination markets share of Ontario merchandise exports in 2012.
* Advanced economies include Australia, France, Germany, Italy, Japan, Netherlands, Norway, Switzerland and U.K.
** Fast-growing economies include Argentina, Brazil, China, Hong Kong, India, Indonesia, Mexico, Russia, Saudi Arabia,
South Africa, South Korea and Turkey. Source: 2013 Ontario Budget; Oxford Economics and Statistics Canada
Share of Total Merchandise Exports to FastestGrowing Economies, 2012 (Per Cent)
Notes: Fastest-growing economies include Argentina, Brazil, China, Hong Kong, India, Indonesia, Mexico,
Russia, Saudi Arabia, South Africa, South Korea and Turkey. Data for Ontario and Canada are actual values.
Other countries are Oxford Economics estimates.
Source: 2013 Ontario Budget, Oxford Economics and Statistics Canada
GDP of Panel Countries, 2000 - 2012
$US Trillion
GDP In USD, not adjusted for inflation
Compiled by Asia Pacific Foundation of Canada; Source: World Bank
Projected Size of Asian Economies to 2025
In US$ Trillions 40
35
30
25
Japan
Korea
20
China
India
15
Indonesia
10
5
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
*Current US$, PPP
Compiled by Asia Pacific Foundation of Canada; Source: OECD Database
OECD’s Long-Term Baseline Projection of GDP Growth
180
160
140
120
Australia
Japan
100
Korea
United States
80
China
India
60
Indonesia
40
20
2060
2057
2054
2051
2048
2045
2042
2039
2036
2033
2030
2027
2024
2021
2018
2015
2012
2009
2006
2003
0
2000
In Trillions
*Current US$, PPP
Compiled by Asia Pacific Foundation of Canada; Source: OECD iLibrary
GDP per Capita
50000
45000
40000
35000
30000
Japan
Korea
25000
China
India
20000
Indonesia
15000
10000
5000
0
2010
2011
2012
*2005 US$, PPP
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Compiled by Asia Pacific Foundation of Canada; Source: OECD Database
India’s GDP Projection in the Long-Run
In US$ Trillions
160
140
120
100
80
60
40
20
0
* GDP in current PPP
Compiled by Asia Pacific Foundation of Canada; Source: OECD Database
Top 10 Canadian Exports to India (C$000s)
Rank
2012
1
Edible vegetables, roots and tubers
504,393
2
Aircraft and spacecraft
283,266
3
Pearls, precious stones or metals
182,889
4
Paper and paperboard
179,705
5
Mineral fuels, oils
161,892
6
Fertilizers
153,654
7
Woodpulp; paper or paperboard scraps
148,813
8
Boilers, mechanical appliances, etc.
120,279
9
Iron and steel
99,847
10
Ores, slag and ash
87,156
Top 10 Chapters Total
Compiled by Asia Pacific Foundation of Canada; Source: Industry Canada
1,921,894
Japan
• Japan is Canada’s thirdlargest trading partner
overall and second largest in
Asia.
• Even with its aging
population and shrinking
economy, Japan will continue
to be one of the world’s
biggest and richest
economies for years to come.
• The economy is dominated
by the highly diversified
manufacturing sector, where
heavy industry co-exists with
cutting-edge robotics
manufacturing and
engineering.
GDP Growth Annual % (2003 – 2012)
6.00
4.00
2.00
0.00
2003
2004
2005
2006
2007
2008
2009
2010
-2.00
-4.00
-6.00
-8.00
Compiled by Asia Pacific Foundation of Canada;
Source: World Bank
2011
2012
Korea
GDP Growth Annual % (2003-2012)
7.00
6.00
• Korea is Canada’s third largest
trading partner in Asia and
seventh largest trading partner
overall.
• Canada’s exports to Korea
are 1.6 times larger than its
exports to India.
5.00
4.00
3.00
2.00
1.00
0.00
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Compiled by Asia Pacific Foundation of Canada; Source: World Bank
Southeast Asia
Indonesia: GDP Growth (Annual %)
Singapore GDP Growth (Annual %)
7
20
6
15
5
4
10
3
5
2
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-5
1
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Malaysia: GDP Growth (Annual %)
8
7
6
5
4
3
2
1
0
-12002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-2
Thailand: GDP Growth (Annual %)
10
8
6
4
2
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-2
-4
Compiled by Asia Pacific Foundation of Canada;
Source: World Bank
Australia
GDP Growth Annual % (2003-2012)
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2003
2004
2005
2006
2007
2008
2009
2010
2011
Compiled by Asia Pacific Foundation of Canada; Source: World Bank
2012
The Current State of China’s Economy:
Economic Slowdown and Structural Changes
The two big questions:
Will China’s economy
face a hard landing or a
happy landing?
What will be the new
drivers of economic
growth?
Economic Slowdown
• Old drivers: foreign
direct investment and
exports to America and
Europe
• Domestic credit-driven
growth
• China now accounts for
31% of global growth
Source: McKinsey Insights China – Macroeconomic
model update (March 2011); Global Insight
Contributors to China’s Economic Growth
100%
90%
80%
70%
60%
Consumption
50%
Investment
Net Export
40%
30%
20%
10%
0%
1995-2000
2000-2005
Source: CEIC and OECD
2005-2010
Economic Growth Rate (2008-2030) and the
Sources of Growth
10
9
8
7
Contribution from total
factor productivity
Contribution from capital
6
5
4
Contribution from labour
3
2
1
0
2008-2010
2011-2015
2016-2020
2020-2025
2026-2030
-1
“Chinese Economy by 2030” composed by Li
Shantong, Liu Yunzhong, et al, published by the
Economic Science Press, 2011.
China’s Housing Index
China Car Registration
In 10 Thousands
Business Confidence in China:
Purchasing Manager Index (PMI)
HSBC Purchasing Managers’ Index
Source: Markit, HSBC.
Consumer Confidence in China
China’s New Economic Drivers
• Mass urbanization
• Rise of the Chinese consumer
• Rise of the upper middle class
• Chinese firms vying both for China’s
market and global markets
• Value-added exports
• Government’s desire to become an
innovation powerhouse
The Four Approaches to Urbanization
• Supercities – a small number of very large cities
with population of 20 million+ (ex. Beijing)
• Hub and spoke – clusters of medium-sized and
small cities around larger cities (ex. Shanghai and
the Yangtze River Delta)
• Distributed growth – a large number of cities with
populations of 1.5 million to 5 million
• Townization – many small cities across the
country with populations of 500,000 to 1.5 million
SOURCE: McKinsey Insights China
Concentrated Urban Growth
• In concentrated urbanized cities scale effects and
productivity gains are greater than in dispersed growth
scenarios – up to 20% higher.
• More efficient use of energy – energy productivity is
about 20% higher in concentrated urbanization models
• Lower rate of loss of arable land
• More efficient mass-transit
• More effective control of pollution
• Greater availability of talent
Concentrated Urbanization = Highest
GDP per Capita
Just How Big Is China’s Consumer Clout?
SOURCE: Global Insight, February 2009;
MGI China Model, February 2009; MGI
Growth of the Urban Middle Class
SOURCE: MGI national forecast model;
McKinsey Asia PFS Survey 2007
Shares of Global Middle Class Consumption,
2000-2050
Source: OECD Development Centre Working Paper No.285
Number of Chinese households by income
level compared with other countries
SOURCE: McKinsey Insights China -Macroeconomic model update (March 2011);
Canback Dangel for United States, Japan, Germany
and Brazil data
What the Urban Consumer Values
•Urban households have higher rates of dualincome and higher-income single person
households that demand quality quick-food
solutions
• 10% annual growth rate in packaged food
and beverage market
• Safety and quality in food and consumer
products
• “Quality of life” / “lifestyle” goods
• Business and professional services
China’s move up the value-chain:
Emerging Strategic Industries
State Council’s Seven
Strategic Emerging
Industries (2010)
• Energy-saving and
environment protection
• New-generation
information technology
• Biology
• high-end equipment
manufacturing
• new energy
• new materials
• new-energy cars
Eurasia Group
• New energy
• Environmental protection
• New materials
• Advanced equipment
manufacturing
• New generation information
technology
• Alternative energy vehicles
• Biotechnology
PwC
• New energy
• New materials
• Information technology
• Biotechnology
• Energy conservation
• Environmental protection
• Aerospace
• Marine
• Advanced manufacturing
• Hi-tech services
New Canadian Ventures in Asia Pacific in 2012
Agri-food Opportunities in Asia
• Seafood – Cantonese cuisine
• Canada is China’s 5th largest source for lobster and 1st largest
source for crab
• Ice Wine
• Consumers new to wine prefer the sweeter taste of icewine to red
wines
• Canadian icewine exports to China have risen by more than 1000%
since 2004
• China is the sixth largest wine consumer market in the world –
Shanghai is the most promising market for wine in China
• Dairy – due to health concerns over domestic brands Chinese
consumers prefer foreign producers such as Canada for trusted dairy
products
• Infant formula
• Health products – nutraceuticals
Clean Technology In Asia
• Waste water treatment
• Solar photovoltaic power generation
• Wind power generation
• Hydrogen and fuel cells
• Solar and geothermal heating
• Biofuels/Biomass
• Air pollution – de-dusting, de-sulfurisation,
vehicle emissions control
Information and Communication
Technology
• Telecom
• Gaming and Animation
• Photonics
• E-learning platforms
•Expenditures on education account for
5.2% of Chinese families’ total expenses,
while in the US it’s only 2.45% and in
Canada it’s 1.3%
Automotive Industry
• Supply of essential automotive
components
• Manufacturing equipment – tool, mold, die
• Automotive aftermarket
• Maintenance and repair services
• Clean energy vehicle technologies
• Hybrids, pure electric, fuel-cell
IMAX in China
• In June 2013 IMAX announced a deal with CJ
CGV South Korea’s largest cinema chain to add
35 new theatres in China and South Korea
• To date IMAX has 133 cinema’s open in China
and another 117 in the pipeline
• Within 10 years IMAX will have more cinemas
in China than in the United States
• IMAX has positioned itself as a premium
consumer brand in China – the Starbucks and
Lululemon of cinemas