Is China Taking Over the World?

1
Is China Taking Over the World?

• International Law of the American Bar Association
• 2006 Spring Meeting
• April 6, 2006
• Shirley-Ann George, VP International Policy
• Canadian Chamber of Commerce
• sgeorge_at_chamber.ca

2
Bottomline

• Chinas entry into the global marketplace
  fundamentally changes everything - and nothing
  about this is simple - US global domination may
  be over

3
WHY?

• History
• Return to position held through out history
• Size
• 1.3B people
• Doubling of global workforce ½ from China
• 125M middle class moving to 300M by 2010
• Economic Might
• GDP 1.8T (US) PPP 8.1T
• Political Structure to Make it Happen
• Sheer Determination to Regain Dominance
• Will not repeat Russias messy move to democracy
• But Challenging Mid-term Cracks in the System

4
Global Impact A New Era

• Not a new phenomenon
• Impacting both domestic-China trade/investment
  global trade/investment
• Driving up prices they consume
• Driving down prices they sell
• Rapidly moving from low cost to high end
• Manufacturing to RD centres
• Need Offensive and Defensive Strategies

5
Integrative Trade

• Core Business Decision
• Where to locate business components
• Changes Govts economic growth strategies
• Need to understand full costs
• Growth Opportunities
• Commodities to feed the boom - Reducing
  supply chain costs
• Attracting Chinese investment - New
  middle-class (Sales Tourism)

Source International Trade Canada
6
Foreign Investment is Key

• Investment Trade Growth Linkages
• Investment in China
• available for Chinese Investment
• Need to aggressively pursue Chinese s
• Need for reciprocal access

7
Dealing with theChinese weaknesses

• Human Rights the Environment
• Different Roles for Government Business
• Multinationals bring higher voluntary standards
• Need to coordination / standards
• Emerging Role of Investment Funds
• Removing Unfunded, Off-book Liabilities
• Internet provides no place to hide
• IP Protection the Rule of Law
• Chinese Stability Regional Asian Stability
• Other Issues
• Currency Manipulation Corruption Bank Stability

8
Chinese FDI in Canada

• Minmetals Noranda
• Proposed Changes to Foreign Investment Protection
  Act (?? Name)
• IP Protection
• Need to attract investment
• Competition for Chinese investment
• Dealing with the fears
• Stated Owned Enterprises
• Major investors not driven by market principles
• Where does Canada fit?

• Energy Oil Sands and Pipeline to B.C.

9
Responding to the Threat

• China is growing the global economy
• Change Winners Losers
• Adapt or Perish
• Bigger threat than Russians in space
• Wheres your Strategy?
• Govt / Business/ Personal
• Not just China
• Find your globally competitive niche
• Essential to Move up the Value-Chain
• Dramatic increase in Education Research
• Build business capacity

10
Is China Taking Over the World?

• No Today we are gift wrapping and
  giving it to them
• Time to wake up
• Response must focus on moving Canada / US up the
  knowledge/innovation curve
• China changes everything up to us to determine
  if benefits North America.