Podcast Transcript: Don't miss these opportunities in Shenyang

Canada has just doubled its commercial footprint in China.

The Canadian Trade Commissioner Service has opened six new offices in China. Starting now Canadian companies can benefit from expanded trade, investment and innovation partnerships with in market and local expertise.

The offices are staffed with business development experts with strong connections within each of the new cities, so Canadian companies might want to put their China strategy on the front burner if it isn’t already.

I’m Michael Mancini, editor-in-chief of CanadExport, the official e-magazine of the Canadian Trade Commissioner Service.

Today we’re looking at Shenyang, the revitalized economic powerhouse in northeastern China. We’ll find out what this region has that Canadian companies might want.

On the phone with me is James Kim, Trade Commissioner at the Canadian Embassy in Beijing. Thanks for speaking with me today James.

James Kim: Hi Michael, nice to be here.

Michael Mancini: So what would you say are the top reasons Canadian companies should do business in Shenyang?

James Kim: Well I’d like to maybe take a step back and look at the Dongbei region. Now our office is located in Shenyang but the Dongbei region is also considered the industrial heartland of China. This region also covers three provinces including the Liaoning province, Jilin, Heilongjiang with a population exceeding 100 million and it’s widely considered China’s heavy industries manufacturing base which includes sectors such as aerospace, automotive and shipbuilding.

Now this region is also considered the rust belt region and this is partly due to the large proportion of state-owned enterprises. But the provincial government’s Northeast Rejuvenation Plan has given the region favourable development and investments policies. As a result, there have been very high growth rates exceeding the national average.

In summary I’d like to say that the Dongbei region is playing catch up to the more prosperous southern regions and there is a small window of opportunity here for Canadian firms to help companies in northeast China catch up.

Michael Mancini: Now when you say a small window of opportunity for Canadian companies to get in there, what exactly do you mean?

James Kim: Well, as I mentioned the growth rate in the region is very high, exceeding 15 and 16%. And you know these high growth rates are not really sustainable in the long term. So we are looking at a few years of very high growth rates. And the infrastructure development opportunities are there, but they will also be disappearing fast.

Michael Mancini: You also mentioned the rejuvenation plan in the region. How has that affected what the region now is all about? You mentioned aerospace, heavy industries, is that still the case?

James Kim: Yes, it’s still pretty much the case but this region is China’s heavy industries manufacturing base. That said it, there’s also new industries that are also developing. For example, Shenyang, the region’s capital, is also a major manufacturing and transportation hub in the northeast, but it’s also developing into a major financial services hub for northeast China.

Also, I would not do the region justice without talking about Dalian, which is a world class port. In terms of volume, it’s the fourth-largest in China and it’s considered a window into the northeast but also a window into the rest of the world. Dalian is developing into a major IT and software development centre. Some say it’s the Bangalore of China. And for example there’s also a $2.5 billion investment by Intel into the city as well, they’re a chip manufacturer. So you know this region is also in addition to the traditional manufacturing base it’s also developing a very robust high tech sector as well.

Michael Mancini: Now often people will talk about doing business in China and they’ll often mention environmental issues as perhaps a barrier to doing business in China. How does the environmental issue play out in this region?

James Kim: Yes, well environmental pollution obviously it is a major issue in this region. But I like to look at it more as an opportunity rather than a challenge. Now according to some estimates this region is also considered probably one of the ten most polluted regions in the world. But this also means that the government is also placing a lot of importance on you know cleaning up the environment and introducing new environmental technologies. So for Canadian companies that have new technologies that can be introduced to help with the environmental protection I think this is a real opportunity right here.

Michael Mancini: Now why was it important for the Trade Commissioner Service to open an office in Shenyang as opposed to service our office there out of our office in Beijing?

James Kim: Well basically Shenyang is about 700 kilometres away from Beijing and it you know simply would not be possible to service Shenyang out of Beijing. It would kind of be like servicing Toronto out of Ottawa. Having a local presence you know allows us to take a much more proactive approach to the market. So our local office is, our local trade commissioner is able to quickly uncover and verify trade leads. And further more this sends a strong symbol that the, Canada places you know importance on the region. And like most of China, relationships are key. And we’re able to better foster these key relationships and the end result is that we’re able to you know facilitate introductions to Canadian companies that do want to do business in this region.

Michael Mancini: Okay. Now I really want to get a sense for what it’s like for a typical company to do business in Shenyang and in the region? What would you say are some big challenges Canadian companies really should be prepared for when it comes to doing business there?

James Kim: Well this region in particular I think it’s relatively unknown for many Canadian companies. What comes to mind for me is unsolicited trade leads for example. I can think of one case where a local Chinese company contacted a Canadian company indicating an interest to make a fairly large purchase order and they invite the Canadian company to visit China to sign the contract. And that Canadian company became suspicious and contacted us.

Through some research we discovered that the Chinese company didn’t even have an office and that it was essentially just a cell phone number. And the company was only registered a few months prior. Clearly this was not a serious buyer. We also discovered that it’s part of a broader scam to have foreign companies think that they have a large purchase order. But when the company actually comes to China they’re asked to pay a commission to get the contract, which of course in the end they will never get. So in the end we can help Canadian companies save time and money. In this case we helped the Canadian company not just avoid a potential scam but also to save the time and effort to come to China.

Michael Mancini: So I’m sure we’ve got a lot of companies interested. If a Canadian company wants to learn more about Shenyang, the region and our office there, who should they contact?

James Kim: Well companies should contact Sam Cui, that’s Sam and his last name is spelled C-U-I. He’s our local trade commissioner stationed in Shenyang. He’s also a native of the Dongbei region so he has a very good understanding of the local customs and business practices in the region. And he has a lot of experience in doing business in China and Dongbei.

So I would encourage Canadian companies interested in the Dongbei region to contact our local representative in Shenyang and contact details can be found at our website, www.tradecommissioner.gc.ca

Michael Mancini: Thank you very much for your time today James.

James Kim: Thank you Michael.

Well that’s all for this podcast edition of CanadExport. Stay tuned for our next podcast which looks at another city in the expansion of the Canadian Trade Commissioner Service in China.

As James said, don’t forget to contact Sam Cui at our office in Shenyang to find out how he can help your company. Go to www.tradecommissioner.gc.ca to do that or you can get Sam’s contact information on the CanadExport website.

While you’re there you can learn more about the other cities in the TCS expansion in China. You might also want to contact one of our 18 regional offices across Canada for help in assessing your export readiness. Again just visit www.tradecommissoner.gc.ca to get that information.

I’m Michael Mancini, signing off for now.

To download our other episodes, just go to www.canadexport.gc.ca or go to iTunes and use the searchword “CanadExport.”