Why Canada should study Five-Year Plan

It is critical that Canadian firms seize opportunities and take advantage of the continuing economic rise of China, according to Dominic Barton, Canadian ambassador to China.

Barton made the comments at a cross-Canada seminar on China's 14th Five-Year Plan (FYP) hosted by the Canada China Business Council (CCBC) on Tuesday. 

With the plan, a road map of China's new economic goals over the next five years (2021-25), the country has established a fundamentally new vision for economic development.

The government will shift its focus from simply maximizing growth to ensuring sustainable, high-quality growth that improves the quality of life for the average citizen, both of which present opportunities and risks for Canadian businesses operating in or with the Chinese economy. 

Furthermore, while Huawei Technologies CFO Meng Wanzhou's case was resolved Friday, experts on Canada-China business ties said that resolution likely will elicit a sigh of relief from companies that do business with China. 

"As we all know, the last couple of years have been very challenging in our bilateral relations between Canada and China," said Barton. "Even as Canada modernizes its relationship with China and develops a more strategic approach, it remains that China is Canada's second-largest trading partner and an important market for Canadian businesses."

Observers have said that no matter how much political and popular outrage was stirred up by Meng's extradition case in Canada and in China, Canadian businesses simply could not afford to cut ties with China, the world's second-largest economy.

The envoy also said that Canada has big advantages in the sectors — such as agri-food, education, health including senior care, and consumer products — to tap into the Chinese market.

And it's worth noting that despite the COVID-19 pandemic and the bilateral challenges, Canada's exports to China increased 8.1 percent to C$25.2 billion in 2020, while Canada's overall global exports decreased by about 12 percent.

Figures for the first seven months of 2021 show even stronger year-on-year growth, in fact record growth of 19.4 percent for Canadian exports to China.

"So, the trade is moving very significantly ahead. The nature of the growth of China has significant implications for Canada's economic prosperity, regardless of one's outlook on it," said Barton. "China really cannot be ignored. Where trade is concerned, our companies need to engage in support of our economic interest while being true to our values. It's essential for Canadian prosperity."

Cong Peiwu, China's ambassador to Canada, said it is important to take a closer look at the fruitful results of China-Canada cooperation through the "microscope for the times".

"Since the establishment of diplomatic relations between China and Canada, both sides have witnessed substantial development in bilateral relations, rapidly expanding trade, booming two-way investment, and deepened converging economic and trade interests," Cong recalled.

Cong told the webinar that China's economy continues to recover steadily and unleash its potential for cooperation. The FYP will provide the Canadian business community with broad market opportunities and greater possibilities for deepening practical cooperation.

"I encourage the Canadian business circle to actively participate in the field of green development represented by low-carbon industries, modern agriculture, environmental protection and energy-saving industries, as well as the building of  a modern industrial system represented by the digital economy, new-energy vehicles and biotechnology," said Cong. 

"Additionally, I hope that the Canadian business community will focus on the new cooperation possibilities created by China's further expanding and opening-up in the areas of finance, manufacturing, medicine [and] education as well as the development of free-trade ports," Cong added.

Andrew Polk, co-founder and head of Economic Research at Trivium China, said Canada is at a critical inflection point. 

China's 14th FYP is now firmly shifting to quality-of-life issues. Canadian businesses need to know and fit in to the key themes in the plan — national economic security, innovation and technology, and ecological civilization — so that they can compete in the Chinese market, according to Polk.

"The big question is what the Canadian government and Canadian businesses will think about to invest in that relationship," said Polk.

According to the report, titled "14th FYP for Canadian Companies in China", released by the CCBC and Trivium China earlier this year, Canadian companies that can contribute to China's new objectives are likely to thrive. Those that cannot, however, may face a more difficult operating environment going forward.