The Bilateral—A CCBC Podcast

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• The biggest legal risks for Canadian companies doing business in China are IP infringement, partner risk, contract risk, and regulatory risk. 
• Some typical assumptions about the legal system are now outdated due to the rapid maturity of the system.
• Best ways to protect your IP include early proactive action/registration, good legal due diligence, and out-innovating the competition.
• Why developing trust with your partners is still crucial.
• How it always seems like the Chinese side wants to change things after a contract is negotiated, and how to prevent this.

Tianpeng’s China recommendations:

• Movie: To Live by ZHANG Yimou
• Book: DENG Xiaoping and the Transformation of China by Ezra Vogel

This multi-part miniseries is sponsored by SnapPay. 

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This multi-part miniseries is sponsored by SnapPay.

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To wrap up our three-part miniseries on the 14th Five-Year Plan, CCBC Managing Director China Noah Fraser interviews his counterparts at the US-China Business Council (USCBC) and China Britain Business Council (CBBC) — Matt Margulies, Senior Vice President, China, USCBC, and Tom Simpson, Managing Director and Chief Representative, CBBC — on the eve of the conclusion of the Two Sessions or “lianghui.” The conversation dives into the parallels and divergences between our three bilateral relationships, and move into practical takeaways from the five-year plan and the Two Sessions, including the real meaning behind those GDP growth targets, foreign investment negative lists, financial market liberalization and much more.

This three-part miniseries is sponsored by Neo Performance Materials Inc.

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This multi-part miniseries is sponsored by SnapPay.

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Next in our awards miniseries is Canada Goose, Gold winner in the Outstanding Member category. This episode features a conversation between CCBC Vice Chair Scott Brison and Dani Reiss, President and CEO of Canada Goose, at CCBC’s AGM Business Forum in the fall of 2021. Scott and Dani cover a variety of interesting topics, including:

• Canada Goose’s Human Nature initiative and its mission to “keep the planet cold and the people on it warm.”  
• The December 2018 opening of the first Canada Goose store in China, and how the business has grown significantly despite the headwinds of bilateral relations over the past few years.
• How people-to-people ties trump politics, and the strength of the Canadian brand, in China and across the world.  
• Canada Goose’s methodical and thoughtful China entry strategy, choosing to go direct to consumer, and running China from China, with a local team which understands China better than anyone at HQ.
• How important IP protection is for a brand based on authenticity. The company tackles counterfeit product where the clothes are made and sold, by raiding locations, training border agents how to detect fake goods, and helping consumers understand how to buy authentic Canada Goose products.
• The complementary role of bricks-and-mortar retail vs online. Canada Goose had 18 stores in China at end of 2021, and in some cities, the cold rooms in their outlets help consumers experience subzero temperatures for the first time.
• Teaming up with Chinese designers for collaborations to make products that are hard to come by, using it to create more demand than supply.

This multi-part miniseries is sponsored by SnapPay.

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Radley Mackenzie is the founder of SinoSports Development in Toronto, which received the Bronze Award in the education category at CCBC’s 2020 Business Excellence Awards. SinoSports combines education and sports, arranging camps, coaching, and recruitment of Chinese athletes to Canadian private schools.

Key takeaways from Radley:

• Sports help Chinese kids to be more well-rounded, something the traditional Chinese education system lacks.
• Drivers of sports development in China include top-down factors from government – it has benefits for public health and helps youth build character, grit, and leadership skills. Bottom-up drivers are parents recognizing the benefits of sports for their children.
• As with many Chinese sectors, there is a dizzying array of impressive numbers to consider. The National Development and Reform Commission has invested US$1.4 trillion into sport, including facilities and infrastructure. Youth sports participation was a $53b industry in 2018 and is growing 14%/year.
• People are watching sports on tv and on their mobile phones. A Douyin short video clip with ice hockey centre Connor McDavid did relatively poorly, only having 13 million viewers. Game 4 of the Stanley Cup had 60 million views, more than all the combined views in the US.

Rapid-Fire Questions:

• Most popular sport in China? Basketball, with 600m fans and 300m participants. Soccer and swimming are also popular.  Winter sports are growing, with more than a million figure skaters, and 20 million ski visits in 2019. Only about 10,000 people play hockey, but they are a sought-after demographic.
• Best-known professional athlete: Basketball player YAO Ming.
• Recommendation to better understand China – a book by Peter Martin called China’s Civilian Army: The Making of Wolf Warrior Diplomacy.

This multi-part miniseries is sponsored by SnapPay.

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Cyndi McLeod, CEO, Canada, for Global University Systems, was CCBC’s 5 at 50 winner in the Alumni category. Cyndi is an expert in strategic international partnerships and international education, and she has worked in both public and private education. Cyndi started engaging in China early, leading the way in British Columbia’s international education efforts back in 1999.

Key takeaways from Cyndi:

• Among her favourite exchange programs: training of Chinese respiratory therapists and of front-line customer services service employees for the 2008 Beijing Olympics.
• Cyndi has also been an education entrepreneur, including in early childhood education. She mentions the different clockspeed of Chinese entrepreneurs – in edtech, for example, if you can’t deliver a return in two months, it won’t work.
• Shifts in government priorities have a big impact on all levels of education. There is an ebb and flow of freedom versus control as industries evolve. You have to anticipate changes and stay ahead of them.
• She misses trade missions and describes how she used them to build bridges with Chinese and Canadian colleagues. You need to have a really good interpreter to help you get the most of these. Cyndi also recalls the 2019 CCBC Women’s Mission and its visit to Shanghai Disney.
• How to transition seamlessly between cultures. She’s had great Chinese mentors and staff around her. They were especially helpful in helping her understand government policy in her sector.
• She talks about the most unique foods she’s had to eat in China, and that while she always drank her own baijiu at banquets, there is definitely less social drinking than in the past. It was always a good source of laughter and camaraderie.

Cyndi’s China recommendations:

• Book recommendations: AI Superpowers by Kai-fu Lee, and The Good Earth by Pearl Buck

This multi-part miniseries is sponsored by Manulife.

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Joe Ng, Founder and Chairman of The JNE Group of Companies, is a winner in CCBC’s 5 at 50 Entrepreneurs category. He founded Joe Ng Engineering in 1980, offering engineering design and consulting services to large steel companies in North America. When the steel industry went into a rut during the 1982 recession, he had to look elsewhere for business and explored China’s potential.

Key takeaways from Joe:

• His 1982 visit to China was a small step that ballooned into three 10-year expansion plans over 30 years. He noticed China’s Five-Year Plan but figured his company was too small for five-year plans, thus the 10-year plans.
• His first 10 years involved matching China’s needs with Canada’s capabilities, making use of Canadian factories idled by the recession by moving them to China. This involved taking apart a plant in one country and reassembling it in another. All three plants are still in operation.
• In his second 10 years, he worked on infrastructure projects enabled by Canadian development financing – projects that brought benefit to Canada by requiring purchases of Canadian products.
• As China developed, its needs changed, and in the third 10-year plan, he found a need for Canadian project management on Chinese-led international projects. Canadian engineers could communicate and better understand safety and process requirements.
• How to develop good business relationships (and not drink too much maotai) – JNE became well-known for only accepting projects that yielded adequate return. This earned him the respect of his counterparts. It’s crucial to really understand your bottom line going in. Don’t fall into a trap of losing money the first time; there will be no second time.
• Philanthropy he’s most proud of – endowing the JNE Chair of Infrastructure Design at McMaster University.

Joe’s China recommendations:

• Favourite Chinese food: Cantonese food (dim sum/noodles/wontons), plus Shanghainese style, especially hairy crab (大闸蟹)

This multi-part miniseries is sponsored by Manulife.

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Ron Ball is a winner in CCBC’s 5 at 50 Entrepreneurs category. Now retired, Ron founded the Escalator Handrail Company, later renamed EHC Global, in 1977 in Oshawa, ON, with only one employee, and his success sets a great example of how dedication and commitment can contribute to the Canada-China relationship. In 2018, Ron became one of the few Canadians to receive the prestigious Shanghai Municipal Government Magnolia Silver Award.

Key takeaways from Ron:

• Any of our listeners who have been to China know just how many escalators there are (and thus how many handrails are needed). Big drivers of demand for escalators: malls and transit (bus stations, airports, subway systems). EHC’s expansion into China in the 1990s was a classic case of following customers into the market. Now 75% of the world’s elevators and escalators are built in China. EHC is a mid-size global company, with operations in 15 countries and manufacturing in Canada, Germany and China. 60% of global sales are at EHC’s Shanghai operation.
• When the Asian financial crisis hit in 1997, Ron moved to China to take charge there, but EHC’s headquarters stayed in Canada. Ron remained living in China for more than 20 years. Even though the market shifted to China, Canada benefited greatly by this arrangement, with stable employment in Oshawa, ON, including keeping the R&D operation at headquarters. Early in the Canadian operation EHC exported a lot, especially specialty items. Keeping R&D in Oshawa was partly for intellectual property (IP) reasons but also because Canada has better engineers. 
• Ron attributes his success as a CEO in China to having strong soft skills – it’s important to be tolerant, patient, and open-minded.
• EHC was afraid of having its IP stolen in China, but that didn’t happen. Why? At first they only brought in old technology; it wasn’t until 12 years ago that EHC brought its best technology to China. When it did, EHC took critical steps – setting up a separate manufacturing plant site with a cadre of employees who had been with the company for more than 5 years, having a high level of security, and being very careful with documentation. Raw material shipments were sent first to a separate warehouse where all identifying information was stripped off. They also gave confidentiality bonuses – 20% pay increase, identified as a confidentiality bonus, so that it would have merit in labour court in China. 
• EHC’s company culture has been a huge strength. What does EHC do differently than a typical Chinese company? EHC has strong HR leadership, pays well (not exorbitantly), treats people well, and this results in much lower turnover than average. The factory is highly effective and efficient – equal to or leading their global operations. They treat people like family, and they respond with loyalty.
• Advice to a company considering doing business in/with China today? Ensure there is a market for your product in China. Don’t look for low-cost labour. Hire good advisors (accounting, legal, etc.).
• Ron describes the COVID-19 quarantine experience in returning to China last year.

Ron’s China recommendations:

• Favourite Chinese food: Simple homestyle dishes like fried rice with shrimp, and Hong Kong-style dumplings
• What to read: Yukon Huang, whose books and publications can be found here.

This multi-part miniseries is sponsored by Manulife.

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Jennifer Fang, Managing Partner, Highnoon Capital & Consulting Inc, is the CCBC’s 5 at 50 winner in the Immigrant category. Jennifer has long and deep business experience helping multinationals in China (GM, JP Morgan & Chase, BMO, PwC), and has devoted her career to facilitating the two-way capital, people and business collaborations between Canada and China. 

Key takeaways from Jennifer:

• Early exposure to Canada as a student in China had a big impact on Jennifer, back in the 1990s. She chose UBC for study and ultimately immigrated to Canada.
• At GM Canada, Jennifer was a member of the founding team that established GM’s joint venture in Shanghai. The Buick minivan still dominates the Chinese market today, and Shanghai GM is GM’s most profitable subsidiary, as well as the largest JV in China. She cited GM’s JV with SAIC as a case study for success, and few know that it is also a Canadian success story, as GM Canada originally shipped parts there. Among the reasons for success: good culture fit and quick, effective localization. GM also stayed for the long haul and didn’t pull out in the dark days. This now pays benefits in China’s growing electric vehicle (EV) market.
• Jennifer laid out a four-point strategy framework for deciding on a JV vs. a WOFE subsidiary.
• What is China like for a Canadian company entering the market today? “The beauty and the beast.” It’s like a deep ocean with abundant wealth and opportunities (the beauty), but it’s also very challenging and complicated environment to navigate (the beast). A company needs to use a holistic strategic planning process, know what it wants, find the right partner, recruit the right team, and focus on the post-deal value creation process. Key questions to ask:
  • Is it possible to set aside a pool of capital for China possible? How much is prudent?
  • Are there any showstoppers?
  • What is the value of China to the company’s long-term success?
• Canadian companies can’t be complacent. Customers want you to have global capability, including China, and if you don’t, you can’t compete. And China requires hard-edged competitiveness.
• We need to generate more awareness of Canada’s brand equity in China. When a Chinese entrepreneur is asked to describe Canada and answers “stability, multicultural, talent, innovation,” then we’ll know we’ve done it right.
• Key lessons learned: 1) Commit for the long term or don’t bother. 2) Need full support from top executives, plus the board. 3) Build bench strength in China. 4) Help is available via a toolbox of resources (including CCBC).
• What sectors are most welcome now for Canadians to develop business with China? Healthcare/care economy/retirement services, high-end /advanced manufacturing, EVs, and hydrogen cells.

Jennifer’s China recommendations:

• Make sure you have a good Chinese name – a real one, with meaning, not a phonetic translation. This is a great conversation starter. Don’t forget, CCBC members can always ask our teams to help with their Chinese names.
• Favourite Chinese food: Mooncakes! One of the few Chinese desserts eaten during Mid-Autumn Festival, they represent family values and unity. They are easy to find in Canada and are great for cross-cultural sharing. Food and sports are common activities that unite and unify. Jennifer pointed out that during the recent Eurocup soccer tournament, the majority of the ads were from Chinese companies, because Chinese men love to watch Eurocup soccer!

This multi-part miniseries is sponsored by Manulife.

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Hon. Jack Austin is the Lifetime Achievement Award winner in CCBC’s 5 at 50 initiative. Jack’s nomination describes him as “likely the longest serving person in both public and private life in building Canada’s modern relationship to China,” active in one or more capacities from 1970 to the present time. He has done so in four different domains: diplomacy and government, legal practice, corporate leadership, and academic leadership.

Key takeaways from Jack:

• The impetus for Canada’s recognition of China back in 1970 was to involve China in the United Nations and help it become a supportive player in global trade, governance, etc. China was very poor in 1970 and unlikely to become an effective global trading country for several decades.
• Early commercial agreements focused on capability building, including oil drilling and recovery, creation of modern industry, and developing a tax system.
• Jack relates his experience with a whole series of Canadian and Chinese senior leaders over 50 years.
• He opines on what a future Government of Canada should do to forge a bilateral relationship that works for Canada, following resolution of the current diplomatic difficulties.

Jack’s China recommendations:

• Books:
  • Henry Kissinger’s On China, and Susan Shirk’s China: Fragile Superpower
• Favourite Chinese foods:
  • Steamed buns, dim sum, and hot and sour soup

This multi-part miniseries is sponsored by Manulife.

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Ching TIEN received CCBC’s 5 at 50 award in the Women’s category. Ching is the founder of Educating Girls of Rural China, a charity with the philosophy that educating women is the fundamental way to alleviate poverty and make better societies. EGRC has sponsored >1300 girls and young women to complete their high school and university education. Key takeaways from Ching:

• The changing nature of philanthropy in China since Ching started EGRC in 2005.
• How things are changing in far-flung places like Gansu. China’s poverty reduction measures are especially obvious in the past few years, and while the urban/rural gap still persists, all boats are rising.
• Many government policies reflect the importance of education. Tuition and accommodation rates at universities across China have stayed flat over EGRC’s 16 years, even as costs of living have risen. And recent policies to grant free high school tuition/board to students below the poverty line, plus loans for university tuition for rural students, make it possible for many more students to obtain higher education.
• A girl who finishes grade nine but cannot go to high school has a much-reduced set of possibilities – if she goes to a city, she may do low-wage factory work, wait tables, or work in a beauty salon. If she stays in the village she will be married by 15-16 and have children quickly. The girls who go on to high school and university bring their families out of poverty and act as role models for their entire village.
• People to people relations will continue, and efforts like EGRC’s create educated women who think for themselves. They all know Ching’s story and how Canada fits in, and several have come to Canada for post-graduate work.
• It costs amazingly little to make a big difference. C$3,600 for three years of high school, and C$2,800-7,500 for four to five years of university, depending on the destination. Learn more about Educating Girls of Rural China here and donate here. For more information, email info@egrc.ca.

Ching’s China recommendations:

• Books and movies that shed light on women’s roles in Chinese culture and the depths of their experiences, particularly:
  • Anything by Amy Tan, including a new movie about her, Unintended Memoir
  • Wild Swans by Jung Chang
• Shanghainese and Cantonese food

Sarah’s recommendation: The new novel by historian Orville Schell, My Old Home: A Novel of Exile

This multi-part miniseries is sponsored by Manulife.

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Howard Balloch received CCBC’s 5 at 50 award in the Relationship Builders category. Howard was Canada’s longest-serving ambassador to China, and then he shifted to a business career in Beijing. He has been in the middle of the political and investment action for many decades. Key takeaways from Howard:

• Relationships are complicated, particularly in a society that lacks traditional faith in institutions of business relationships, such as legal, contractual and societal. You need strong personal relationships to buttress nascent business relationships.
• When negotiating in China, be prepared for whiplash. The actual negotiations take a long time, so you must keep at it, and maintain your sense of humor. Don’t be afraid to be Canadian through the process. Once you reach an agreement, and it’s pedal to the metal, and your Chinese counterparts may go from incredibly patient to incredibly impatient. They need to develop their confidence in a relationship, and we want to have things locked up contractually.
• The future of the Canada-China business relationship is people. Strong relationships will help Canada transcend these difficult times.

Howard’s China recommendations:

• Books:
  
  • Jonathan Spence, The Search for Modern China – for those who want to understand China, and The Death of Woman Wang
    Pearl Buck, The Good Earth
• Movies:
  • Crazy Rich Asians – to understand China, you need to understand the younger generation

This multi-part miniseries is sponsored by Manulife.

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In Part 2 of a three-part miniseries on China’s 14th Five-Year Plan (FYP), CCBC Managing Director China Noah Fraser interviews Trey McArver, the co-founder and partner on politics at Trivium China, one of China’s most sought-after boutique political and economic policy analysis shops. Trey dives into five key sectors of interest to the Canadian business community – identifying the challenges and opportunities in the latest FYP for businesses in financial services, agribusiness, natural resources, energy and cleantech.

This three-part miniseries is sponsored by Neo Performance Materials Inc.

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In Part 1 of a three-part miniseries on China’s recently released 14th Five-Year Plan, CCBC Managing Director China Noah Fraser sits down with Alfredo Montufar-Helu, Director, Beijing of the Economist Corporate Network. In a macroeconomic clinic on the China market, Alfredo talks about the fundamentals of the 13th Five-Year Plan, goals set out for the 14th Five-Year Plan, new policy terms like dual-circulation and demand-side reform and much more.

This three-part miniseries is sponsored by Neo Performance Materials Inc.

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In this episode of The Bilateral, we hear from John Stackhouse, author and Senior VP, Office of the CEO, RBC, and his views on the value of Canada’s expat community beyond the “Great White North.” In his recently released book, Planet Canada, John contends that our country’s greatest untapped resource may be the three million Canadians who don’t live here.

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We are pleased to introduce the premiere episode of the Bilateral, the flagship podcast from the Canada China Business Council (CCBC).

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