Grande conférence Les Affaires China: Toward a new economic model. Presented by: Jean Masson

Transcription

1 Grande conférence Les Affaires China: Toward a new economic model Presented by: Jean Masson Quebec City, April 19, 2012

2 The modernization of China: The awakening of a sleeping dragon Modernization does represent a great new revolution. The aim of our revolution is to liberate and expand the productive forces. Without expanding the productive forces, making our country prosperous and powerful, and improving the living standards of the people, our revolution is just empty talk. We oppose the old society and the old system because they oppressed the people and fettered the productive forces. We are clear about this problem now. The Gang of Four said it was better to be poor under socialism than to be rich under capitalism. This is absurd. - Deng Xiaoping (leader of the PRC from ), November 1979

3 The Rapid Urbanization of China Urbanization: A means of ensuring that collective wealth, standard of living, and quality of life increase. Projection: China s urbanization rate may reach 70% by 2030, from the current 47%. GDP growth: approximately 7% over the next five years. Expanding infrastructure projects will lead to the emergence of a large middle class.

4 The Rapid Urbanization of China City Early 80s 2010 Growth (%) Shenzhen Guangzhou Beijing Chongqing Shanghai Chengdu Tianjin

5 The rise of China s middle class During the past 30 years, a middle class has come into being in China. Estimated at 300 million people out of a population of 1.3 billion. Approximately the same size as the entire population of the United States. China s 12th 5 Year Plan seeks to promote inclusive growth to help bridge the gap between rich and poor. According to Professor LU Xueyi of the Chinese Academy of Social Sciences, 23% of the population are now part of the middle class; five years ago this figure was 18 percent. It is estimated that the number will increase by 1 percent every year. The middle class could therefore reach 40% of the population by 2020.

6 The Chinese Economy China s relevance in the global economy cannot be overstated. In 2010, China surpassed Japan to become the world s second largest economy after the United States. 10% annual growth over the last 30 years. Largest exporter in the world, 2 nd largest importer of goods. Transition from an export-based economy to an economy focused on promoting its domestic marketplace.

7 China s 12th 5 Year Plan ( ) Transformation of the current economic model to a sustainable innovative economy based on domestic consumption. China would like to become an end market (a place where the final transaction in the chain of value takes place) rather than an export market. Maintain stable growth by expanding domestic demand.

8 China s 12th 5 Year Plan ( ) Bolsters innovation through research and improved intellectual property rights. Promotes balanced urbanization and regional development. Improved environmental protection. Will further urbanize China and create a greater demand for foreign resources.

9 China s focus on infrastructure Significant investment in the construction of roads and railways between 2001 and Following the 2008 economic recession, the central government of China bolstered its economy with one of the largest stimulus packages ever organized. Half of the stimulus package was devoted to infrastructure spending. Expansion of China s highspeed rail network was a priority.

10 China s focus on infrastructure In 2010, China planned to lay 18,640 miles of track by The Beijing-Shanghai high speed line alone was budgeted at $30 billion dollars. Spending of $300 billion on high speed rail lines over the next 20 years. China's General Administration of Civil Aviation has budgeted $62 billion to build 100 new airports by The China Center for International Economic Exchanges (CCIEE), a government think tank, estimated that one rural resident moving to an urban area would lead to an investment of approximately 100,000 yuan ($15,240) in infrastructure construction and public services.

11 China s Go Global Strategy Despite the 2008 financial crisis, Chinese investments abroad are growing. Chinese government policy encourages domestic businesses to Go Global and invest in foreign markets. China holds the world s largest foreign exchange reserves: $3 trillion. The China Investment Corporation (CIC), China s Sovereign Wealth Fund, was created in 2007 to manage part of the People's Republic of China's foreign exchange reserves. CIC is estimated to hold over $400 billion in assets. In January of 2011, CIC opened its first foreign representative office in Toronto, directed by major Canadian financer Felix Chee.

12 Canada-China Relations Canada was one of the first nations in the west to recognize the People s Republic of China in October of Since then, Canada and China have enjoyed a relatively stable political and economic relations. Successive Canadian governments have recognized the importance of diversifying trade with China. Today, China is Canada s 2 nd largest trading partner. As of 2010: Canadian exports to China: $13.5 billion Canadian imports from China $44 billion dollars

13 Recent Trade Developments In April 2010: The China Banking Regulatory Commission designated Canada as an authorized destination under China s Qualified Domestic Institutional Investor (QDII) program Canadian financial markets access to up to $8 billion in investment capital as a result of this deal.

14 Recent Trade Developments In February 2012: Negotiations are concluded for a Foreign Investment Promotion and Protection Agreement. Canada agrees to export uranium to China. Preliminary discussions on the feasibility of a Free Trade Agreement have begun.

15 Chinese Investment in Canada Chinese firms are actively investing abroad and have expressed a strong interest in investing in Canada. The United States, Canada and Australia rank highest in terms of perceived openness to China. Canada is seen as a gateway to the U.S. and other key international markets. As of 2009, a survey of Chinese companies revealed that energy and natural resources, agri-food and biotech were seen as the most promising sectors for investment in Canada. As of 2010, four of Canada s top five exports to China are commodities. Foreign direct investment into Canada from China reached approximately $14 billion at the end of 2010.

16 Examples of Chinese Investment in Canada- Natural Resources 2012 Adriana Resources and WISCO Joint Venture related to the to Lac Otelnuk project, located in the Plan Nord area: $13 billion 2011 PetroChina purchased half of EnCana s Cutbank Ridge: $5.4 billion 2010 Sinopec Corp, China s second-largest oil producer, agreed to purchase ConocoPhillips 9.03 percent stake in Syncrude Canada Ltd., the largest oil sands project: $4.65 billion

17 Quebec-China Relations The Consulate General of the People s Republic of China in Montreal opened in nd biggest consulate in Montreal after that of the United States. Maintains and increases Quebec-China relations in cooperation with Ms. ZHAO Jiangping, Consul General of China in Montreal. Priorities: in addition to trade, education, culture and tourism.

18 Conclusions Chinese enterprises are willing and able to invest in Quebec and the rest of Canada. Quebec and China will benefit from investments such as Adriana / WISCO. With Chinese investment, the goals set out in the Plan Nord are attainable and will strengthen the Quebec economy.

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