Investment

Survey: Most Canadian companies turn a profit in China

By Zhao Yanrong (China Daily)
Updated: 2010-10-27 10:58

BEIJING - More than three-fourths of Canadian companies operating in China are profitable, with about 85 percent expressing some level of satisfaction with their overall performance in the country, despite challenges, a report released by a Canadian think tank on Tuesday said.

The Asia Pacific Foundation (APF) of Canada, an independent and not-for-profit think tank on Canada's relations with Asia, conducted a survey from August to October this year of Canadian businesses in China.

Of the 95 valid responses from more than 600 Canadian companies doing business in China, 76 percent said they are making profits, which is 11 percentage points higher than their counterparts from the United States.

Two-thirds of respondents said China's impressive growth, its huge market and their following-up of key customers were the top three factors in their companies' decision to enter the Chinese market.

The service sector is the strongest industry of Canadian companies operating in China, with more than 67 percent involved in the business.

The companies surveyed expressed a high degree of satisfaction with respect to housing, safety and social support, but were clearly dissatisfied with the air quality and the level of pollution.

Rule of law and environmental problems were also identified as the two major obstacles to doing business in China.

"The obstacles to doing business in China should not be underestimated," said Yuen Pau Woo, president and CEO of APF Canada.

"The results of this survey provide a road map for Canadian and Chinese interests, together with the international business community, to work on business constraints in China."

Martin Donner, chairman of the Borden Ladner Gervais Asia-Pacific practice group, said it is encouraging to see most Canadian companies are profitable in China, despite the challenges.

"The survey results remind Canadian businesses of the need for continued attention to regulatory systems and processes as a context for business activities in China," Donner said.

"China represents an important opportunity for many of our clients and these survey findings confirm that for those that do it smartly, the rewards justify the investment."

China is Canada's second largest trading partner and third largest export market, with almost $30 billion two-way trading volume last year.

And China is the biggest single target country for Canadian investment with $1.5 billion this year, the Export Development Canada said in September.

"There is no question that two-way commercial ties between Canada and China will grow in the years ahead," Woo said.

"The challenge is to remove the barriers that hold back the potential for even stronger and deeper economic relations between the two nations."

China Daily