OJPC Report: Ontario Must Expand Exports to Emerging Markets
Ontario seems to finally get it, that diversifying trade with emerging Asia and especially China will be a key strategy for the province’s long-term future prosperity. That’s the first of several conclusions of this week’s Ontario Jobs and Prosperity Council’s (OJPC) Advantage Ontario report.
For decades, as the manufacturing heartland of Canada, Ontario has been shipping most of its products south of the border. In fact, fully 77% of the province’s exports went to the US to the tune of some $150 billion last year. While the US remains Ontario’s (and Canada’s) biggest customer, OJPC points to the rapidly rising middle class in Asia and other regions of the developing world that will drive most of global consumption of higher value-added goods and services going forward. In a short decade or more, citing a report by Morgan Stanley Smith Barney, over 50% of global consumption will be from there as the US and EU continue their slide.
But, Ontario firms have been slow in diversifying export markets. While Ontario’s exports to the US have steadily declined over the past ten years plummeting to $127 billion in 2009 from the peak of $180 billion in 2002, only 1.4% of Ontario products and services goes to China and a paltry 0.3% to India, underscores OJPC.
The Council urges the Ontario government and firms to work together and focus on sectors where the province possesses inherent advantages and where global demand is rising – agri-food, advanced manufacturing, tourism, health care, education, housing, infrastructure, financial services, natural resources, IT, and life sciences. While manufacturing remains by far the mainstay of Ontario’s exports (85%), Ontario must increasingly concentrate on advanced manufacturing on a global scale. The export capacity of Ontario firms is under-utilized and they must do more to leverage Asian and other ethnic communities in tapping into global markets.
In addition, in light of major mineral discoveries such as the massive Ring of Fire chromium and other base and precious metal deposits, OJPC says the province must open up undeveloped regions of the north to Chinese and other Asian firms for resource extraction while promoting northern tourism. The Canadian Press reports that China bought over 50% of world’s ferrochrome (for the making of stainless steel) supply last year that ensures stable demand from emerging markets over the coming years.
But, especially worrying for OJPC is the lagging export performance of Ontario’s small and medium-sized enterprises (SMEs). Only a small fraction of them export (a mere 6.4% in 2008) and the average value of the products they do export remains very low. Given the limited resources of most SMEs to explore and develop emerging global opportunities, the OJPC proposes the creation of a simple, integrated one-window online portal for SMEs to access government information and support.
The government should also boost partnership programs such as the Global Growth Fund that spotlights the building of Ontario SME export capacity. A coinciding recommendation is to set up large “reverse trade missions” centered on key emerging markets in partnership with the private sector. Reverse trade missions combine current efforts at building export capacity (market seminars, incoming buyers’ sessions and market studies, and so on) into bigger, integrated and high-impact events aimed at key markets.
Ontario SMEs should also take advantage of the under-utilized “soft innovation infrastructure” embodied in the Ontario Network of Excellence (ONE) that includes public-private-academic consortia like MaRS, Communitech and Invest Ottawa to support ‘born global” start-ups and accelerate their export growth. Finally, in addition to drawing upon recent immigrants and international students for export expansion, OJPC advocates significantly increasing the number of international students at post-secondary institutions and expanding programs to keep the most talented and entrepreneurial after they graduate.
OJPC hopes the Ontario government will reconvene the Council within a year to review progress and update Ontarians.
Lhasa’s Central Barkhor District to Get a Face-Lift
The government of Tibet’s capital city has begun a seven-month, 1.2 billion yuan ($196 million) project to help preserve Lhasa’s ancient heart.
State-owned China Tibetan News, citing a city government news conference from Friday, said the project will update the Barkhor area’s infrastructure, including water, sewer and electrical lines. The government also will build heating facilities, remove fire hazards, improve sanitation services, regulate signs and dismantle illegally built structures.
Believed to date back to the seventh century, the Barkhor has been built around Tibet’s holiest shrine, the Jokhang Temple. It is one of the most vibrant areas in Lhasa, where monks, pilgrims, residents and tourists mingle. Barkhor Street — which circles the temple — is a pilgrim route, but it is also known for shopping among tourists as it is filled with vendors selling traditional and religious artifacts.
The city will provide free space to 2,956 Barkhor vendors at one of the city’s prime locations to help minimize losses during the construction, China Tibetan News said.
– AP
Beijing-Guangzhou High Speed Rail Line Opens Next Week
International journalists were taken on a trail run of the new HSR line which will officially debut on December 26, Mao’s birthday. China’s HSR has moved on since the fatal crash of sub-HSR trains in the summer of 2011 having concluded that it was due to design flaws and mismanagement. Rail officials are confident that such accidents will not occur on HSR lines.
Here is a BBC video report. http://www.bbc.co.uk/news/world-asia-china-20829930
Reuters video: http://www.reuters.com/video/2012/12/22/china-unveils-worlds-longest-high-speed?videoId=240088025&newsChannel=china
Reuters article: http://news.yahoo.com/china-open-worlds-longest-high-speed-rail-line-113235873–business.html;_ylt=A2KJNF97XtZQTAkAGoXQtDMD
World’s Largest Building Being Erected in Chengdu, Sichuan
Just one indicator of how inland Chinese development is booming. But the Chinese penchant for size is bewildering.
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Sebastien Blanc/AFP
A thousand kilometres from the nearest coast a towering glass wave rolls over the plains of Sichuan, the roof of what Chinese officials say will be the world’s largest standalone structure.
The 100-metre-high “New Century Global Centre” is a symbol of the spread of China’s boom, 500 metres long and 400 metres wide, with 1.7 million square metres of floor space, big enough to hold 20 Sydney Opera Houses according to local authorities.
By comparison the Pentagon in Washington — still one of the world’s largest office buildings — is barely a third of the size with a mere 600,000 square metres of floor space.
But it represents a different side of China, where lower costs and government subsidies are still fuelling double-digit growth in Chengdu, the capital of Sichuan province.
Sebastien Blanc/AFP
Sebastien Blanc/AFP
The city of 14 million people plans to expand its subway from two lines to 10 by 2020, build a new airport and become a new Silicon Valley.
The Global Centre will house offices, conference rooms, a university complex, two commercial centres, two five star hotels, an IMAX cinema, a “Mediterranean village”, a skating rink and a pirate ship, among other attractions.
About 400,000 square metres will be devoted to shopping, most of the outlets high-end luxury brands. Despite Chengdu being around 1,000 kilometres from the sea the complex has a marine theme, with fountains, a huge water park and an artificial beach, accented by the undulating roof, meant to resemble a wave.
– AFP
China E-commerce World’s Biggest in 2013
I buy a lot of stuff and services online, often much cheaper than in retail stores.
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Cyberspace is the new frontier as China is poised to overtake Japan and the US as the biggest e-commerce market in the world next year.
Suning Appliance Co Ltd, China’s largest electrical appliances retailer, has its own online retail website for several years; Alibaba has continued to expand by consolidating taobao.com, etao.com, tmall.com, ju.taobao.com, Alibaba Small Business, Alibaba International Business and Alibaba Cloud Computing – all under its wings – into one huge marketplace.
Vancl, Yihaodian, 360buy.com and Suning have gone one step further with their applications for licences to set up their own express delivery companies.
Every now and then, new online retail companies will don advertisements at subway stations and on subway trains.
On Tuesday, Chinese Commerce Ministry spokesman Shen Danyang said at a press conference that in the first three quarters of the year retail sales from e-commerce transactions in China reached 806.2 billion yuan (C$128.3 bil), which was up by 44% from the corresponding period last year.
He said the bank card penetration rate was 46.3% while average spending by the use of bank cards grew by 24.3%.
The ministry’s e-commerce division head Li Jinqi was quoted by China Business News as saying that e-commerce grew by more than 30% between 2007 and 2010 and the number of online consumers in China reached 210 million by the second-half of the year.
China is expected to overtake Japan and the United States as the largest online retail market in the world next year.
The proportion of e-commerce sales against the total retail sales of consumer goods surpassed the 1% mark in 2008 and increased to 4.32% last year, he said.
– (Malaysian) star online