MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 1

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1 M I N I S T R Y O F E C O N O M I C D E V E L O P M E N T BRITISH COLUMBIA ASIA PACIFIC INITIATIVE MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 1

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3 MESSAGE FROM THE PREMIER I am pleased to introduce the Province s Asia Pacific Initiative, our government s vision for strengthening British Columbia s competitive position as the preferred economic and cultural gateway between North America and the Asia Pacific region. In the Pacific Century the world will be beating a path to the growing economies of China, India, Japan and South Korea. For British Columbia, the path to a stronger, more vibrant relationship with Asia begins in our principal strengths - our strong, open economy, unique geographical location, spectacular natural environment, and diverse, multicultural community. Today, we are building on those strengths. By gathering strategic advice on marketing B.C. products and services to the Asia Pacific through the recently created Asia Pacific Trade Council. By making key infrastructure investments in our ports, rail, road and air infrastructure to move people, products and services to their destinations more quickly and effi ciently. By leveraging the enormous advantages of the 2010 Olympic and Paralympic Winter Games and introducing international marketing programs like Dream Home China in Shanghai to help open the door to even more business with Asia Pacific countries. B.C. will become a preferred trade and investment partner with Asia Pacific nations and reap the economic, social and cultural benefits that will flow from the Pacific Century. But only if we act boldly and quickly to reach our goals and demonstrate that British Columbia is an integral part of the Asia Pacific. By acting now, we will cement our province s reputation as the best place on earth to live, work and invest, creating a legacy of economic growth and prosperity for generations of British Columbians to come. Premier Gordon Campbell MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 3

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5 MESSAGE FROM THE MINISTER I am pleased to present the Asia Pacific Initiative British Columbia s compass pointing the way towards the Pacific Century economy. In this document we recognize we must be bold in creating our own future - we cannot sit back and hope that fortune continues to smile on our province. We have a strong economy and the advantage of a diverse and talented population, abundant natural resources and the geographic advantage of being Canada s Pacific Gateway but it is up to each of us - governments, industries, investors, citizens, professionals, entrepreneurs and communities from every region and economic sector - to leverage our advantages into continued economic growth. In order to diversify British Columbia s economic ties with the Asia Pacific, we will focus on five priority areas: advance our global identity as Canada s Pacific Gateway; continue to build a world class infrastructure and supply chain; strengthen and maximize our trade and investment relationships with Asia; become the Asia Pacific education, tourism and cultural destination of choice; and ensure our labour force is equipped with the skills to thrive in the Pacific Century economy. British Columbia already has strong economic, cultural, and personal ties with our neighbours across the ocean. Those existing relationships make British Columbia as much a part of the Asia Pacific as we are of North America. It s time to turn those relationships into a strong foundation for long-term prosperity. The Asia Pacific Initiative signals to the rest of Canada and to the world that British Columbia recognizes the economic importance of the Asia Pacific. It demonstrates how we intend to realign our priorities and prepare British Columbia s economy for the unprecedented opportunities in Asia. I invite British Columbians to join with us to turn the opportunities presented in this Initiative into tangible results not only for the benefit of British Columbians, but also for the rest of Canada and for our Asian neighbours. Colin Hansen Minister of Economic Development and Minister Responsible for the Asia Pacific Initiative MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 5

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7 MESSAGE FROM THE PARLIAMENTARY SECRETARY I am pleased to join with Premier Campbell and Minister Hansen in the release of the Province s Asia Pacific Initiative. The Initiative has come about due to the efforts of many staff and advisors both within government and in the Asian and business communities. Their input is greatly appreciated. British Columbia is Canada s Pacific Gateway and we are well-positioned to lead this country into the Pacific Century. The Asia Pacific Initiative has crystallized the collected wisdom and expertise of many British Columbians. It provides a roadmap outlining our cultural and economic landscape and the actions we can take to reach our goals. It is clear that a wide range of Canadians in communities across the nation realize the opportunities and the challenges presented by the strong and growing Asia Pacific economies. As a Pacific Rim country, it is time for us to work together to develop fully a closer relationship with our Asian neighbours. This is a golden opportunity for governments, First Nations people, business communities, multicultural communities, workers, professionals and investors to work together for the benefit of all British Columbians, all Canadians, and all the nations of the Asia Pacific. Over twenty per cent of our province s population is of Asian decent, among the highest anywhere in the world outside of Asia. It is time to take advantage of British Columbia s diverse economic and cultural connections to the Asia Pacific region to further optimize trade and investment. It is time to focus on building our gateway infrastructure whether it s in transportation, communications, business services, education, tourism or cultural activities to welcome the Pacific Century. I echo the sentiments of Premier Campbell and Minister Hansen: we must be bold; the time to take action is now. Richard T. Lee Parliamentary Secretary for the Asia Pacific Initiative MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 7

8 ACKNOWLEDGEMENTS The Asia Pacific Initiative represents the culmination of the work, consultation and advice of British Columbia s private and public sector leaders. The Government of British Columbia takes this opportunity to recognize these efforts, particularly the work of the B.C. Asia Pacific Trade Council, the B.C. Competition Council, the Asia Pacific Foundation, and the B.C. Progress Board. Key documents that supported the drafting of the Initiative can be found at: Asia Pacific Trade Council B.C. Competition Council Asia Pacific Foundation of Canada B.C. Progress Board B.C. Ports Strategy and federal-provincial Pacific Gateway Action Plan Ministry of Transportation 8 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

9 CONTENTS 1. The Pacific Century Canada s Pacific Gateway Asia Pacific Initiative Moving Forward Appendices 41 Appendix A Asia Pacific Market Profiles 42 Appendix B Performance Indicators and Economic Impacts 56 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 9

10 THE PACIFIC CENTURY The most important global economic transformation of the 21st century is the rise of the Pacific economy as in the Renaissance when Venice facilitated the meeting of the West and the Orient, this Asia Pacific Initiative envisions British Columbia Canada s Pacific Gateway as the Venice of the Pacific Century and the crossroads between Asia and North America.

11 THE PACIFIC CENTURY BRITISH COLUMBIA S VISION Few world trends are more important to the future of B.C. and Canada than the continued emergence of Asia as a global economic power. The region contains many of the world s largest and fastest growing economies, representing a massive US$10 trillion market and an estimated US$2.5 trillion in foreign reserves for investment. The 21st century will be the Pacific Century: a century dominated economically by enormous trade between Asia and North America. British Columbia, Canada s Pacific Gateway is situated between the world s two largest economic regions and must prepare to realize the unprecedented economic opportunities this global economic transformation presents. British Columbia will be the national catalyst for Canada s Asia Pacific success through strong leadership and a nurturing environment for investment and business opportunities. We will bring together B.C. s political, business and cultural leaders to position the Province as the pre-eminent economic and cultural crossroads between Asia and North America. The annual economic benefits of achieving this goal will drive economic prosperity in B.C. and Canada for decades. By 2020, the annual trade gain will be an estimated $76 billion for B.C. and $230 billion for Canada as shown in Exhibit 1. The total employment impact is estimated to be 255,000 jobs in B.C. more than the entire manufacturing sector in the province today.» EXHIBIT 1 B.C. s 2020 Goal for the Pacific Century British Columbia is recognized internationally as North America s capital for Asia Pacific commerce and culture. Estimated Economic Impacts Achieving this goal will position the province as an important partner in the Asia Pacific economic region, driving economic development and prosperity in Canada and B.C. for decades. Estimated Annual Trade Impacts Canada 2005 $102 billion Canada 2020 $333 billion Gain $231 billion B.C $29 billion B.C $106 billion Gain $77 billion Note: trade includes exports and imports of merchandise and services between Canada/ B.C. and Asia Pacific economies. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 11

12 THE PACIFIC CENTURY For Canada, the job impact by 2020 may be as high as 500,000 jobs very significant considering that Canada s forestry, mining, fishing, and oil and gas sectors combined currently represent 300,000 jobs. With our partners, the province will be guided by a Pacific Century future where British Columbia:» is part of the economic and cultural fabric of the Asia Pacific region;» has an Asia Pacific import and export trading relationship that is diverse and benefits all regions of the Province;» has investment partnerships that progress Asia Pacific economic ties;» is the preferred West Coast commerce and trading centre for Asian nations;» is a tourism, cultural, and knowledge exchange destination of choice; and» has citizens with the Pacific Century skills to compete globally and maximize Asia Pacific opportunities. ASIA RISING China, together with Hong Kong, is now the world s second largest economy. It has enjoyed robust growth for several years, fuelled by capital investment, export growth and the steady expansion of its domestic market. More than thirty special economic zones have helped boost innovation and attracted US$600 billion in foreign investment since 1990, the third largest stock in the world. Other economies in the region are also driving change including Japan s huge economy and wellestablished history of innovation and technology; South Korea s extensive manufacturing presence; and Taiwan as a venture capital hub. India is growing at about double Canada s economic growth rates. If it continues on its current pace, India s economy could hit $2 trillion in GDP by India has the fastest growing middle class in the» has world-class supply chains that are the Asia Pacific gateways of choice;» THE WORLD S LARGEST ECONOMIES GDP Rank GDP Rank U.S. 12, ,800 2 China 8, ,600 1 Japan 4, ,800 4 India 3, , Source: The Economist, 2006; at purchasing power parity. 12 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

13 world and is also exploiting its wage advantage and changing the distribution of global employment in the process. Its relatively young population will supply approximately 140 million new workers one-third of all new workers worldwide by Asia as a whole will supply two-thirds of the total increase in the global workforce from 2005 to The world economy is expected to be two-thirds larger in 2020 than it is today. At this pace of growth predictions are China s contribution to this global expansion will be 27 per cent and India 12 per cent. China will displace the U.S. as the world s largest economy by 2020 and Asia s share of world GDP will increase from 36 per cent in 2005 to 43 per cent by China and other Asian economies are pursuing bilateral economic cooperation agreements with our competitors in resource production and other countries that possess the market capacity to absorb Asia s growing exports. A new pan-asian free trade zone is planned by 2015, backed by Japan and India, that is expected to become the largest trading block in the world. In the Pacific Century, economic power will continue to shift towards Asia. This trend cannot be ignored. As Asian economies become more integrated into the global system of production, they are creating an impact greater than that of the industrial revolution. BRITISH COLUMBIA S UNPRECEDENTED OPPORTUNITY Asia s growth is not a short-term phenomenon. Urbanization in China and India will create demand for new infrastructure to support an estimated 65,000 new urban dwellers per day for the next 20 years, a total of 480 million people. This demand is roughly the equivalent to building a city the size of Victoria every day for the next 20 years. The associated infrastructure expansion will generate strong demand for B.C. s natural resources and services. The Asian middle classes are also expanding quickly, creating a vast new market for many different products and services. Those include some of the mainstays of B.C. s economy, including forest.» EXHIBIT 2 BRITISH COLUMBIA S STRATEGIC LOCATION Asia Population b GDP - US$10 trn BC Canada Exports North America to Asia US$250 b Beijing Seoul Tokyo Imports Asia to North America US$535 b North America Population m GDP - US$14 trn Mumbai Hong Kong Taipei Singapore 1. Source: The Economist, 2006 at purchasing power parity. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 13

14 THE PACIFIC CENTURY products, energy and mineral resources, agricultural products, seafood, manufactured goods, transportation and tourism, as well as new growth areas such as biotechnology, education and environmental services. Asia and North America have a combined population of 4.3 billion people and economies worth US$24 trillion representing 56 per cent of the world s economy. Due to its geographic advantages, social fabric and quality of life, B.C. is strategically located to benefit as a conduit between the world s two largest economic regions, as illustrated in Exhibit 2. B.C. s participation in the 2008 Summer Olympic and Paralympic Games in Beijing also provides a unique opportunity to build on the Olympic momentum and expand Canada s Asia Pacific business connections and cultural ties. Hosting the 2010 Winter Olympic and Paralympic Games in Vancouver will be a once-in-alifetime opportunity for the Province to increase international exposure and awareness of British Columbia as an Asia Pacific Gateway. IMMEDIATE ACTION IS CRITICAL Canada s proximity to the United States guarantees that it will remain our most important trade partner. However, China may soon replace Canada as the largest foreign participant in the U.S. market. Preferential access to the U.S. no longer ensures sustained economic prosperity for British Columbia and Canada. Canada is already considered by some to be at least a decade behind international competitors in the Asia Pacific. For example, Australia, supported by all levels of government, has led an aggressive campaign to position itself as an Asian nation 2. With an economy about two-thirds the size of Canada s, it has made strategic investments in supply chain infrastructure, provided resources to promote trade and investment, and established strong formal relationships with leading Asian economies. More importantly, Australia attributes its success to a consistent and ongoing presence in local markets essential to their knowledge and understanding of rapidly changing Asian economies. As well, Australia has made multilateral trade agreements with Asia Pacific economies a 2. Areas where Australia has outperformed Canada include: attracting foreign direct investment from Asia (Asian foreign direct investment in Australia was $US 88 billion compared to US $17 billion in Canada in 2004) and, international students (more than 230,000 Asian students studied in Australia versus 87,000 in Canada in 2004). 14 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

15 THE PACIFIC CENTURY priority, and is in the process of negotiating these agreements. Viewing the Asia Pacific as our economic future and not a competitive threat, will require a major shift in our international and economic policies. Some of the immediate actions to make this shift for British Columbia will be: As a small, trade dependent nation, Canada must confront the challenges associated with making this shift. Perhaps the greatest risk for Canada and British Columbia in the Pacific Century economy is inaction. Moving forward we must ensure that our actions are strategic, consistent and sustained.» Working with the federal government to ensure Asia is a national economic priority;» Adopting an Asia Pacific mindset that pervades all aspects of our society to expand our critical mass and capacity; and» Establishing a B.C. presence and unique identity in Asia to increase our trade, investment, and cultural linkages. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 15

16 CANADA S PACIFIC GATEWAY B.C. is as much a member of the Asia Pacific family of nations as it is part of North America. It is also Canada s leading Asia Pacific cultural, tourism and business hub. 16 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

17 CANADA S PACIFIC GATEWAY B.C. S ASIA PACIFIC STRENGTHS» Asian institutes and as it is part of North America. It is also Canada s leading Asia Pacific As Canada s Pacific Gateway, British advanced education» B.C.-Asia Pacific health partnerships cultural, tourism and business hub. Columbia provides an important» Competitive business environment link to the vast region of the Asia British Columbia s key Pacific. Because of its location, British advantages and assets relative Columbia is well positioned as a to the Asia Pacific are: transportation gateway between» Geography Geography Our proximity North America and Asia. Strong» Transportation linkages to the U.S. and the shortest land- family, cultural and commercial ties» Established Asian communities sea-air route between Asia and with Asia augment this geographic» Asian business and North America. This means two support networks to three days shorter sailing time advantage. B.C. is as much a member» Low cost of living» Quality of life» Strong government and cultural ties of the Asia Pacific family of nations compared with ships serving U.S.» EXHIBIT 3 DIRECT TRADE ROUTES Prince Rupert Effi cient Market Access Asian Ports Edmonton Saskatoon Calgary 12,300km (24 days) Halifax Winnipeg Montreal Vancouver Seattle Tacoma Portland Toronto Albany Minneapolis Chicago Major Railways 14,200km (27 days) New York Detroit Louisville Oakland Los Angeles Long Beach Mobile New Orleans Houston M I N I S T R Y O F E CO N O M I C D E V E LO P M E N T :: B R I T I S H CO LU M B I A A S I A PA C I F I C I N I T I AT I V E 17

18 CANADA S PACIFIC GATEWAY west coast ports, and more effi cient air links via the Great Circle Route. Transportation linkages. Effi cient road and rail connections to major markets across North America. The Port of Vancouver is served by three major intercontinental railways, an advantage that is unmatched by» EXHIBIT 4 CULTURAL TIES Asian % of population: B.C Alberta 7.0 Canada 9.8 Washington State 5.5 Australia 2.8 Population by mother tongue in B.C. Chinese 308,000 Punjabi 122,000 Korean 28,100 Japanese 17,900 Other 110,000 Total Asian 586,000 Source: B.C. Stats any U.S. port, as shown in Exhibit 3. The Port of Prince Rupert also provides the shortest (3 days) direct route to the United States large midwest and eastern consumer markets. Established Asian communities. Twenty per cent of B.C. s population is of Asian descent compared to 10 per cent in Canada, 7 per cent in Alberta and 3 per cent in Australia. The mother tongue of 600,000 B.C. residents is Chinese, Korean, Japanese, or other Asian languages (see Exhibit 4). Asian business and support networks. The Vancouver-based Asia Pacific Foundation is one of Canada s foremost centres for research, analysis and information on Trans-Pacific relations. There are many other supporting organizations in B.C. including:» S.U.C.C.E.S.S., one of the largest immigration and social service agencies in the province;» the Hong Kong-Canada Business Association;» the Canada-Japan Chamber of Commerce;» the Confucius Institute at the BC Institute of Technology; and,» the ASEAN-Canada Business Council. The HSBC Bank of Canada is the Canadian arm of the largest bank in Asia outside Japan. The Bank of East Asia - Hong Kong s largest local independent bank - has two branches in B.C. s lower mainland, its only location on the Pacific coast except for California. Strong government and cultural ties. Vancouver s 52 consulates include 14 Asian countries and Singapore s only diplomatic presence in Canada. B.C. celebrates its diversity through several major cultural events every year such as the Chinese 18 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

19 New Year, the Japanese Blossom Festival, the Diwali Festival, the International Children s Festival, and the Vancouver Asian Film Festival. Asian institutes and advanced education. B.C. is a leader in university and advanced education programs in Asian studies. The University of British Columbia (UBC) has a permanent Asia Pacific Regional Office in Hong Kong that serves the entire region, a Canadian university first. The University provides a focal point for sharing information and ideas across the Pacific through its Asian Centre and Asian Research Institute. The UBC Library has the largest collection of Asian language materials in North America. Simon Fraser University has an Asia-Canada program and the David See-Chai Lam Centre for international communication. The University of Victoria has a Centre for Asia Pacific Initiatives and offers co-op programs with Asia through its international business school and Asia Pacific studies. Extensive education partnerships. B.C. has the largest English-as-a-second-language market in Canada with approximately 100 organizations operating in Vancouver. British Columbia postsecondary institutions are leaders in international education, and the provincial government supports these global partnerships because of the important educational, social and cultural linkages they create. International education is also an important part of B.C. s kindergarten to grade 12 public school system with approximately 6,500 international students enrolled in B.C. schools. Thirty per cent of B.C. s grade 12 students writing provincial second language examinations choose Asian languages including Mandarin, Punjabi and Japanese. B.C. s Ministry of Education also certifies educational programs delivered in schools in Asian countries offering the B.C. curriculum and employing B.C. certified teachers. B.C. Asia Pacific health partnerships. The British Columbia Centre for Disease Control is a state-of-the-art facility with a staff of internationally recognized experts. The Centre is the keystone connecting B.C. s population health objectives to Canada and the world and is poised to become the Pacific centre of excellence in disease control and prevention of emerging infectious diseases including pandemics and avian influenza. Competitive business environment. Vancouver has the lowest business costs of any North American Pacific city based on analysis by KPMG. Low cost of living. Canada is one of the most affordable countries in the world in which to live based on the 2005 World Competitiveness Yearbook Cost of Living Index: Canada 67.3; U.S. 76.6; Australia 76.9; China 86.5; and Hong Kong Quality of life. Vancouver ranks third among 215 cities worldwide as one of the most desirable major cities to live according to the World Competitiveness Yearbook, EXISTING ASIA PACIFIC TRADING RELATIONSHIPS As shown in Exhibit 5, the United States is B.C. s largest trading partner with $23 billion of B.C. s annual exports or 64 per cent of the province s total exports. Asia Pacific is the next largest market consuming $8.5 billion per year of B.C. goods; of this, Japan, China and South Korea together account for $6.8 billion, or 19 per cent of the province s total exports. Annual merchandise imports to B.C. from Asia are $17 billion, representing about 50 per cent of B.C. s imports. During the last ten years, B.C. exports to the U.S. grew 5.2 per cent a year while exports to Asia decreased about 1 per cent a year. Although the decline in Asian trade appears relatively small, it represents $650 million in lost economic opportunities to B.C. since MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 19

20 CANADA S PACIFIC GATEWAY Of greater concern is the downward at 11.6 per cent a year, driven by trend. If B.C. s export growth rate to significant gains from China, Japan Asian markets were to match the and South Korea. Asian market previous growth performance for profiles are available in Appendix A. U.S.-bound exports of 5 per cent a Asia is also an important trade year, B.C. would be able to double partner for Canada. Canadian Asia Pacific exports from $8.5 billion exports to Asia in 2005 were in 2005 to $16.8 billion by $26 billion, or 6 per cent of total We must act now to benefit from Canadian exports. Imports to Canada the growing Asian marketplace. from Asia are approximately $65 In contrast, B.C. imports from the billion a year, or 17 per cent of total U.S. increased 3.4 per cent a year Canadian imports. Canadian services while imports from Asia grew» EXHIBIT 5 B.C. S MAIN TRADE PARTNERS US Asia Pacific Japan China Growth Rate $ % $ % $ % $ % $ % $ % $ % $ % exports to Asia are $5.5 billion a year, of which nearly one-third is to Japan. 3 TRENDS AND OPPORTUNITIES B.C s opportunities vary considerably across Asia and are driven by several broad trends including: demographics, urbanization, an increasingly affl uent and growing middle class, the shift from an agrarian to a white-collar workforce, an increasing demand for education, global production processes and supply chains, and foreign direct investment. Exhibit 6 highlights some of the representative opportunities in sectors where B.C. and Canada have proven strengths. These opportunities range from high-end consumer products and services to infrastructure, technology, 3. Services account for 12.5 % of Canada s total exports. There is no provincial services trade data available. S Korea $1.2 $ % 16.7% Exports Imports 20 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

21 health care and business and financial services. Countries such as India and China have a huge demand for education, including graduate programs and upskilling of middle-aged workers. B.C. seafood products are almost exclusively sold to Asian markets and the benefits of increased exports often flow to coastal rural communities and First Nations. A wide range of local market conditions and other factors will dictate the specific opportunities. Success will depend on developing the appropriate products and services and marketing them effectively. Although urbanization is creating sustained demand for capital goods and raw materials for construction, demand is also growing for service sector exports. There are opportunities to improve the quality of life for millions of people through urban planning, transportation and traffi c management, architecture and environmental engineering and services. Asian consumer markets are also changing. Consumers are becoming more affl uent and sophisticated, which is driving demand for new products and services. However, discretionary income is still limited in many markets and competition is intense. Canadian companies must compete on real product advantages and develop niche strategies to be successful. Perhaps one of the biggest commercial opportunities» EXHIBIT 6 REPRESENTATIVE SECTOR OPPORTUNITIES IN THE ASIA PACIFIC AGING POPULATION TREND: two-thirds of household decision-makers will be over 40; exceptions are India, Philippines, Malaysia, Vietnam. OPPORTUNITIES: tourism, health care, financial services, technology. China Japan India S.Korea Taiwan SE Asia URBANIZATION TREND: 65,000 new urban dwellers per day expected over the next 20 years (480 million people); shift to white collar jobs. OPPORTUNITIES: forestry, mining, building products, environmental products and services, engineering, infrastructure, energy. China Japan India S.Korea Taiwan SE Asia GROWING AFFLUENCE AND EMERGING MIDDLE CLASS TREND: households earning more than US$6,000 are expected to increase by 90 million in the next decade. OPPORTUNITIES: education, tourism, fisheries, food and beverages, electronics, telecommunications, entertainment, software, biotechnology. China Japan India S.Korea Taiwan SE Asia EDUCATION TREND: growing demand for school age and graduate programs. OPPORTUNITIES: education services. China Japan India S.Korea Taiwan SE Asia GLOBAL SUPPLY CHAINS TREND: production shift to low-cost Asian factories underscores importance of global supply chains to access world markets, particularly in the U.S. OPPORTUNITIES: transportation and logistics China Japan India S.Korea Taiwan SE Asia FOREIGN DIRECT INVESTMENT TREND: companies using FDI as a strategy to build global supply chains OPPORTUNITIES: financial services, high-tech, real estate, natural resources China Japan India S.Korea Taiwan SE Asia MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 21

22 CANADA S PACIFIC GATEWAY in the next decade will be the growth of the working age empty nester. In China alone, this group will increase by nearly 100 million people within ten years. Urban development expertise and local government engagement are key to providing solutions and opportunities to accommodate for this rapid growth. There are also important opportunities related to transportation and logistics. At stake is the opportunity to capture a projected three-fold increase in B.C. container port traffi c by Vancouver International Airport use is projected to increase by 68 per cent from 17 million passengers in 2006 to more than 28 million passengers by Asia Pacific trade and tourism are critical to this future and rely on adequate infrastructure and cost competitive supply chains. The development of more liberal air bilateral agreements with markets such as India is also an important step towards closer Asia Pacific economic partnerships. MAJOR CHALLENGES For British Columbia to take advantage of its strengths and realize the benefits of Asia Pacific economic opportunities, the government of British Columbia will need to work closely with private and public sector partners to focus on the core challenges and interrelated issues. Raising international awareness about British Columbia s Asia Pacific advantages. Awareness must be cultivated among opinion leaders regarding the role and value of B.C. s Pacific Gateway both within North America and in Asia. An important challenge is overcoming the perception in Asia that Canada is complacent about developing the necessary physical and supporting soft infrastructure, such as services, human resources and education institutions, that underpin and drive high value international commerce. A related challenge is the sheer size and diversity of the different markets in Asia that make branding and awareness more complex. Building strategic supply chain infrastructure and improving supply chain reliability. B.C. s gateway success depends on an effective and effi cient transportation system to make trade possible. Approximately 95 per cent of the container traffi c and 55 per cent of the bulk export cargoes moving through major B.C. ports are Asia Pacific related. Some 60 per cent of Vancouver International Airport s international 22 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

23 CANADA S PACIFIC GATEWAY passengers are Asia Pacific travelers. Therefore, a key challenge is to ensure timely private and public sector investment and expansion of transportation system capacity to meet demand. A more liberal international air policy or open skies is also critical to ensure access to the gateway. Negotiation and implementation of agreements for sectors without policies are essential in maximizing opportunities. Addressing B.C. s declining shareinasiapacificmarkets. B.C. s export performance in Asia has been slipping. The province s overall share of major Asian merchandise markets fell from 0.56 per cent in 1994 to 0.26 per cent in Each 0.1 per cent in market share is worth about $85 million in annual exports to B.C. and $250 million to Canada. Asian markets are increasingly dynamic and complex. Although consumers are hungry for new products and services, the marketplace is highly competitive. Production by local competitors, often at a significant cost advantage, makes knowledge and understanding of local markets one of the main challenges for commercial success in Asia. A sustained presence by B.C. is required in the Asia Pacific region to build long-term trading relationships and to promote trade and investment, cultural exchange and educational linkages. DevelopinganAsiaPacific gateway culture in B.C. The key to a bustling commercial gateway is critical mass the people, services and supporting government policies that make it a desirable destination for Asia Pacific business, investment and tourism. The challenge is to build this critical mass through foreign and domestic investment, innovation and industry-government partnerships that maximize B.C. s inherent gateway advantages. Ensuring B.C. has a diverse and talented workforce to secure its place in the Pacific Century economy. With more than one million job openings in the next 12 years, and 650,000 young people in our school system, B.C. s ability to capture Asia Pacific opportunities will depend on our ability to enhance and develop the skills for the Pacific Century economy. With every Canadian provincial jurisdiction facing similar challenges, B.C. must attract relatively more new workers, retain those we have, while increasing their skill levels to remain competitive in the Pacific Century economy. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 23

24 ASIA PACIFIC INITIATIVE British Columbia s goal is to be recognized internationally as North America s capital for Asia Pacific commerce and culture. British Columbia s goal for Canada is that our entire country is fully maximizing British Columbia s Asia Pacific advantages to have the highest standard of living and best quality of life in the world. 24 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

25 ASIA PACIFIC INITIATIVE 2020 GOAL AND OBJECTIVES In developing the British Columbia Asia Pacific Initiative, the province recognizes that success will be determined by the combined efforts of both Canada and B.C. In this regard, the province has set an overall goal for Canada in recognition of the critical leadership role of the federal government in using B.C. s strategic assets to chart Canada s economic future. B.C. has also set economic objectives and targets to measure the success of Canada and B.C. efforts. See Appendix B for an economic impact analysis. CANADA GOAL Canada is fully maximizing British Columbia s Asia Pacific advantages to have the highest standard of living and best quality of life in the world. BRITISH COLUMBIA GOAL British Columbia is recognized internationally as North America s capital for Asia Pacific commerce and culture. OBJECTIVES 1. B.C. is a preferred trade and investment partner with Asia Pacific economies. 2. B.C. is the destination of choice and a hub for Asia Pacific tourism, cultural exchange and business services. 3. B.C. is the most highly educated, skilled and multilingual society in North America. ECONOMIC IMPACTS : CANADA Gateway Jobs (000 s) Trade (C$ Billion) Investment (C$ Billion) Gain Gain Gain Objective Objective Objective Total $102 $333 $231 $40 $82 $42.4 Total estimated job gain by 2020 for all of Canada : 500,000 jobs ECONOMIC IMPACTS : BRITISH COLUMBIA Gateway Jobs (000 s) Trade (C$ Billion) Investment (C$ Billion) Gain Gain Gain Objective Objective Objective Total $29 $106 $77 $5.1 $10.5 $5.4 Total estimated job gain by 2020 for B.C.: 255,000 jobs Notes: Canadian benefits include British Columbia. Trade includes imports and exports of goods and services. Investment includes inbound and outbound foreign direct investment and is based on the estimated change in total stock of FDI. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 25

26 ASIA PACIFIC INITIATIVE KEY STRATEGIES 2 Strengthen British Columbia s Asia Pacific trade and To meet B.C. s Asia Pacific goal, a investment relationships five-part strategy was formulated to ensure B.C. is enhancing to address our core challenges: our existing business linkages 1 Build a global identity for with the Asia Pacific and Canada s Pacific Gateway to developing new partnerships ensure B.C. is recognized globally for emerging opportunities. as North America s Pacific Gateway and as an integral player in the Asia Pacific economy.» EXHIBIT 7 B.C. S KEY ASIA PACIFIC STRATEGIES 3 Develop a world-class supply chain and gateway infrastructure to ensure B.C. supply chain has the capacity to fully maximize Asian economic opportunities and is known world-wide for effi ciency, reliability and value. 4 Develop and attract a labour force that has Pacific Century skills to ensure that the Province has the people with the skills to thrive in the Pacific Century economy. ASIA PACIFIC DESTINATION ASIA PACIFIC IDENTITY TRADE AND INVESTMENT RELATIONSHIPS 5 Position British Columbia as North America s Asia Pacific destination to ensure B.C. capitalizes on growing Asia pacific tourism, cultural exchange, and demand for education, business and financial services. PACIFIC CENTURY SKILLS WORLD CLASS GATEWAY INFRASTRUCTURE 26 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

27 STRATEGY 1 PACIFIC GATEWAY IDENTITY British Columbia is Canada s Pacific Gateway because of our commercial, geographic and socio-cultural ties with Asia. B.C. must differentiate itself from competitors and create connections that lead to longterm relationships. International engagement by Canada s and British Columbia s most influential government and business leaders will be essential for success. STRATEGY 1: ACTIONS i. Ensure Canada s Pacific Gateway is a top priority on the national economic agenda. To position British Columbia as the North American gateway to the Asia Pacific, the Pacific Gateway must become a national priority that is demonstrated both in governmentwide policy and ministerial engagement. This is essential for Asia to perceive Canada as a serious player in Asia. It is also necessary to ensure appropriate resources are allocated and to refocus Canada s economic and foreign policy to address the global transformation that is occurring in the Asia Pacific. Currently there is no designated leader to champion Canada s interests in the Asia Pacific. British Columbia will become Canada s Asia Pacific ambassador to champion Canada s interest in the Asia Pacific and will aggressively promote the Asia Pacific Initiative as a priority internationally, nationally, and provincially. This plan will include annual federalprovincial Asia Pacific summits to engage senior political and business leaders in Canada and throughout Asia to focus on the Asia Pacific Initiative s progress and other critical policy issues. ii. Establish a compelling global identity and comprehensive Asia Pacific marketing initiative. Without a consistent and compelling global identity in Asia, B.C. s presence in Asia will continue to be overshadowed by our competitors. As B.C. is Canada s Pacific Gateway for trade, tourism, investment and immigration, we must promote a brand and identity that is synonymous with quality, service, and value and has global recognition and appeal. In addition to a brand identity, B.C. will develop a marketing program and promotional campaign to raise the international and national profile of our Asia Pacific role and to demonstrate that B.C. is embracing the Asia Pacific as the central part of its future. These promotional efforts will also highlight to British Columbians and Canadians the importance of the Asia Pacific to the economic, social and cultural fabric of our province. iii. Establish long-term relationships with senior Asia Pacific government and business leaders. Our success in Asia depends on creating connections that lead to long-term relationships. In North America, business relationships stand on their own, but in Asia many business partnerships are built on personal relationships. Critical in developing these longterm relationships is on going and sustained contact between B.C. and Asia Pacific political and business leaders. B.C. will create and implement a proactive Asia Pacific Engagement Calendar that targets key Asia Pacific leaders and events, and complements federal government and private sector engagement activities. A powerful tool to enhance relationships between communities will be strengthening the Province s existing twinning relationships with Asia Pacific communities and cities. While B.C. currently has an adhoc twinning program in place with approximately 60 twinning arrangements, there is an untapped opportunity to develop strategic, MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 27

28 ASIA PACIFIC INITIATIVE targeted twinning relationships focused on mutual economic and cultural interests with communities and regions in Asia. These relationships, in turn, will result in more business opportunities for the participating communities. iv. Lever the Olympic momentum. Hosting the 2010 Winter Olympic and Paralympic Games in Vancouver provides an once-in-a-lifetime opportunity for the province to increase international exposure and awareness of B.C. as an Asia Pacific crossroads. The B.C./Canada Pavilion in Beijing in 2008 will be a platform to promote awareness of B.C. s role in the Asia Pacific and maximize strategic economic and partnership opportunities. These promotional efforts will also identify sector specific opportunities arising from the games, such as promoting B.C. as a place to do business, maximizing the Province s seafood and agri-food industry, showcasing B.C. wood products and promoting tradable services like environmental technology and education. B.C. will also explore options to build on this momentum at other international events such as the Expo 2010 in Shanghai and for the 2010 Asian Games in Guangzhou. v. Coordinating role for B.C. in Asia Pacific relations. The current engagement approach by B.C. and Canada in the Asia Pacific is fragmented and uncoordinated, which does not portray a positive international image in Asia. To succeed in the fiercely competitive Asian market, B.C. must coordinate Asia Pacific actions not only across provincial agencies (e.g., Tourism BC, Forestry Innovation and Investment, B.C./Canada Beijing House), but with the federal government, western provinces, and the business community. The province will establish a central unit to coordinate provincial interests and to be a primary point of contact for national and international partners and investors, and an Asia Pacific knowledge base to accommodate research and analysis that will advance B.C. s interests in Asia. B.C. government representatives, where possible, will work collectively with Canada and the Western Provinces to ensure effective use of resources and provide optimum government service with locally engaged trade and investment representatives in key Asian markets to promote and market B.C. Together these efforts will contribute to an impression in Asia that B.C. and Canada are serious about success in Asia. 28 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

29 STRATEGY 1: EXPECTED RESULTS» Canada s policies, programs and ministerial engagement support the advancement of the Pacific Gateway in a manner relative to the scope of the opportunities.» $75 million in international exposure generated for Canada s Pacific Gateway brand at the Beijing Olympics in 2008.» B.C. is recognized internationally as a member of the Asia Pacific trading region by 2010.» BC - Canada s Pacific Gateway is one of the most recognized brands in the Asia Pacific region by STRATEGY 2 TRADE AND INVESTMENT RELATIONSHIPS British Columbia s geographic proximity to the growing markets of Asia makes it an ideal business bridge for global companies seeking access to the region. B.C. is also the perfect launch pad for Asian companies seeking to enter the lucrative North American market. Forestry, mining and agriculture remain the backbone of our economy and provide tremendous opportunities in Asia. Ministry officials responsible for promoting these traditional sectors have made great in-roads into Asian markets and those efforts must be accelerated. As personal incomes in Asia climb, there will be increased demand for B.C. s services sector exports such as financial services, health and life sciences, energy, information communication technology, high-tech, gaming, fuel cell research and construction. B.C. s manufacturing sector includes a broad range of products including plastics, computers, and aerospace products as well as more traditional products such as food processing, pulp, paper and other lumberrelated products. There are potential niche industries in manufacturing which have a small export base, but have very high growth rates. Existing and new long-term relationships must be pursued to maximize B.C. s Asian cultural and business assets, improve goods and services exports, and benefit from the estimated US$2.5 trillion in foreign reserves available for investment by Asian economies. We need to integrate B.C. into Asian economies by encouraging Asian investment and expanding market opportunities based on B.C. s strengths natural resources, technology and services, gateway infrastructure, and research and development. STRATEGY 2: ACTIONS i. Establish British Columbia trade and investment representatives in priority Asia Pacific regions. B.C. s presence in Asia is critical to attract investment and to provide the local market knowledge and understanding that B.C. and other Canadian companies need to identify and pursue opportunities. The focus will be market opportunity driven, targeting initiatives that can be expected to bring the most value. Full-time B.C. trade and investment representatives will be located in key Asian markets including China, Japan, South Korea and India. These representatives will promote investment by hosting investment workshops and will also collaborate with other industry initiatives such as Forestry Innovation Investment and Tourism B.C in marketing the province as Canada s Pacific Gateway. ii. Accelerate B.C. s access to the emerging Asia Pacific markets. B.C. needs to better identify our core competencies and align them to Asian market needs in the most promising sectors with the most economic potential. (See Appendix A: Market Profiles.) In the resource sector, B.C. s forest, mining and minerals, agriculture and seafood sectors need to develop MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 29

30 ASIA PACIFIC INITIATIVE new programs and strategies that match Asian opportunities to increase B.C. s market share in Asia. B.C. will develop sector maps to identify country specific opportunities for B.C. companies. In addition, the Dream Home China program will be expanded to include additional wood products demonstration facilities to increase awareness in Asia of the benefits and opportunities for using woodbased products in construction. Other Asia Pacific opportunities continue to emerge in new industries as fresh markets open up and new technologies are developed. For B.C., these opportunities include growing businesses in service sectors such as life sciences, environmental technologies, and financial services. B.C. is also seen as a leader in renewable energy technology. B.C. will develop export and marketing strategies for the emerging service export sectors based on what Asia needs. This includes services sector exports such as financial services, health and life sciences, energy, information communication technology, hightech, gaming, fuel cell research and construction. This will involve coordinating provincial and federal activities so that B.C. firms, products and services are marketed more effectively. iii. Increase in-bound and outbound investment with Asia. B.C. has become one of the world s most attractive investment opportunities, yet most of the investment decision-makers are not aware of B.C. s potential. A key role of government is to ensure that information about B.C. s competitive advantages as an investment destination are communicated. B.C. will launch a comprehensive Asia Pacific Investment Marketing and Attraction Program, including multilingual investor promotion materials to facilitate Asian investment in B.C., host investment workshops in Asia, and conduct joint Asian investor tours with the goal of stimulating Asian investment interest in the province. These actions support the Asia Pacific Trade Council s recommendations to attract Asia Pacific investment in key industry sectors in B.C. iv. Create an Asia Pacific electronic, multilingual gateway. A state-of-the-art electronic gateway will be developed to link B.C. business interests with Asia Pacific business and investment opportunities. Through Small Business B.C., the interactive Asia Pacific business and export planner will provide a multilingual, integrated platform that can be accessed by a variety of users to facilitate twoway investment. It will also provide businesses with tools and support to increase their capacity to pursue export and investment opportunities. 30 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

31 v. Reduce competitive barriers to trade and investment. B.C. must offer investors a sharp competitive edge over other developed jurisdictions to increase our investment and business linkages. B.C. must work to eliminate internal and external impediments to trade, investment and labour mobility to increase productivity and make B.C. more attractive for investors. B.C. can expand the British Columbia/ Alberta Trade, Investment and Labour Mobility Agreement to increase harmonization of standards and credentials among the western provinces and the territories, and explore opportunities with our U.S. partners in the Pacific Northwest economic region: Alaska, Washington State, Oregon Idaho, and Montana. In addition, B.C. can improve its competitive position by streamlining and updating legislation and policy to minimize the burden on B.C. s businesses and to enhance their competitiveness internationally. Bilateral agreements are an important tool to formalize business relationships and increase trade and investment. B.C. must take an active role in developing Provincial positions and championing B.C. priorities in internal and international trade forums. This includes advocating the federal government to work with the Provinces on enhanced bilateral trade, investment and cooperation between Asia Pacific nations and Canada in areas of mutual economic interest. STRATEGY 2: EXPECTED RESULTS» Full-time representation established in key Asian markets by 2007;» A $1 billion increase in Foreign Direct Investment by 2010, $3 billion by 2015 and $5.5 billion by 2020;» A $15 billion increase in trade with the Asia Pacific by 2010, and $35 billion by 2015;» Additional western Canadian jurisdictions signed on to the BC-Alberta Trade, Investment and Labour Mobility Agreement by 2008;» A pilot Pacific Northwest trade and mobility arrangement in place by 2008; and,» B.C. is perceived as the most attractive jurisdiction in Canada for Asia Pacific business and investment by STRATEGY 3 WORLD-CLASS GATEWAY Without a world class port, airport, road and rail network, B.C. cannot promote itself as a Pacific Gateway. The province and the private sector understand that in order to compete successfully on the world stage as an international gateway, B.C. requires a reliable, cost-competitive supply chain. The province and the private sector have already invested in the Pacific Gateway Strategy Action Plan, which identifies critical infrastructure projects, operational improvements and policy initiatives to accommodate 2020 growth targets:» The province has planned investments of almost $4 billion to support the Pacific Gateway Strategy Action Plan;» Industry is moving to accommodate the projected growth in traffic with about/ almost $3 billion in announced investments and a further $1.6 billion under evaluation; however,» Canada has only allocated $591 million to support the strategy in October 2006 (under the federal Asia-Pacific Gateway and Corridor Initiative) and has committed an additional $410 million over seven years for the Asia Pacific Gateway as part of the 2007 Budget. Canadians invested the equivalent of $6.4B in today s dollars to open up the St. Lawrence Seaway in Clearly, more federal investment is required today to grow and maximize Canada s Pacific Gateway as a strategic national asset. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 31

32 ASIA PACIFIC INITIATIVE STRATEGY 3: ACTIONS i. Implement the Pacific Gateway Strategy Action Plan. British Columbia, in partnership with the federal government, western provinces, and industry leaders developed a comprehensive plan including infrastructure and policy initiatives identified as critical to meeting forecasted trade traffi c demands over the next 15 years. The plan includes increasing capacity for air traffi c, rail, roads and tide-water ports. To advance this plan and capitalize on the associated trade traffi c growth targets and economic benefits, aggressive and focused action and investment is required. The B.C. government is working with the federal government to maximize the potential of Canada s Pacific Gateway to ensure provincial trade supply chains are competitive globally. ii. Support the implementation of a combined B.C. ports system. The federal Department of Transport is currently reviewing the potential for combining its key lower mainland trading ports the Vancouver Port Authority, the Fraser River Port Authority, and the North Fraser Port Authority. B.C., western Provinces and industry leaders previously endorsed and are highly supportive of this initiative. Combining these ports would eliminate the fragmentation of jurisdiction of B.C. port authorities and streamline port infrastructure development and administration in the lower mainland. Most importantly, Canada s Pacific Gateway would be better positioned to compete with North America West Coast facilities rather than among ourselves. In reviewing the amalgamation of B.C. s lower mainland ports, it is important that the federal government also consider the complementary economic development opportunities of Canada s northern Pacific Gateway through the Port of Prince Rupert. Canada s northern and southern gateway ports should be working together to coordinate planning across the supply chain to maximize the economic value of B.C. s ports system for western Canada. iii. Maximize B.C. s northern gateway potential. B.C. along with communities and the private sector must maximize the opportunities to leverage northern gateway assets and associated economic opportunities, including natural resources and pipeline infrastructure. This will make better use of the northern supply chain capacity and engage the potential of First Nations communities and surrounding regions. 32 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

33 Apart from Prince Rupert, which is entering into the Asia Pacific container trade with its Fairview Terminal, the port communities of Kitimat and Stewart have an important role in meeting the capacity challenges of increased commodity and value-added exports to and from Asia. Also important is expanding the supporting infrastructure such as telecommunications and electricity transmission capacity. iv. Streamline regulatory review processes for priority gateway projects. The rest of Canada is depending on B.C. to be prepared for the enormous increase in demand from Asia for Canada s resources, products, and services. In addition to Pacific Gateway transportation infrastructure projects, several gateway pipeline projects originating from the Alberta oil sands and numerous mining proposals are being considered or are underway. To ensure that Gateway projects are treated as economic priorities to all Canadians, the B.C. government will work with the federal government to harmonize review and approval processes. v. Additional actions to enhance Gateway competitiveness. The Pacific Gateway Action Plan, the B.C. Ports Strategy and the B.C. Competition Council identified a number of priority policy recommendations to enhance B.C. s international gateway competitiveness. Areas identified include:» international air policy liberalization and foreign airline ownership;» streamlining environmental approvals to secure investment;» reviewing port taxation; and» industrial and transportation land utilization. STRATEGY 3: EXPECTED RESULTS» More than $15 billion in private and public investment in airport, port, road and rail infrastructure in British Columbia and western Canada by » By 2010, B.C. s southern and northern gateways are able to handle 3.5 million TEU in container trade a 53 per cent increase over 2006.» By 2015, Canada s Pacific Gateway supply chain infrastructure ranks number one in the world in terms of reliability and efficiency.» B.C. s northern gateway and hub potential is optimized with 25 major projects (pipelines, port expansion, mineral development, etc.) underway and/or completed by 2015.» A federal-provincial partnership that enhances the competitiveness of Canada s Pacific Gateway, and advances priority gateway projects.» Increased direct flights from more Asia Pacific countries to B.C. s international airports. STRATEGY 4 PACIFIC CENTURY SKILLS The shortage of skilled workers has become the top multi-sectoral issue in B.C. and is a major threat to capturing opportunities in the Asia Pacific. In British Columbia more than one million job openings need to be filled in the next twelve years, while only 650,000 young people are coming up through our school system. The Province must continue to work with business and industry to address the existing and projected skills shortage to remain competitive in the Pacific Century economy. Immigration will continue to be a key source of skilled workers required to support economic growth. Currently, Mainland China is the leading source country for immigrants to 4. Source: Western Canada Transportation Infrastructure Strategy, March 2005, prepared by the Western Provincial Transportation Ministers Council. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 33

34 ASIA PACIFIC INITIATIVE British Columbia, followed by India and the Philippines. South Korea has become the leading source of foreign students in Canada. In order to meet the skills challenge, B.C. must attract more new workers, retain those we have, while increasing their skill level and productivity. STRATEGY 4: ACTIONS i. Attract people from Asia Pacific countries to move to and work in B.C. The coming demographic challenge means B.C. must look differently at worker recruitment. In order to support employers and increase the potential workforce, British Columbia will launch an international and domestic marketing campaign to attract skilled workers as part of its WorkBC Initiative. This campaign will include easy access to multilingual information on work and life in B.C. via a one-stop portal. The portal will provide the tools needed to link to employers, navigate the visa process, and access other economic and social settlement transition services. ii. Maximize the skill sets of immigrants in B.C. and coming to B.C. from Asia. Current immigration processes for skilled workers remain unacceptably long. Skilled immigrants from many key Asia-Pacific source countries can wait years for decisions on their visa applications. To increase the number of skilled workers coming to live and work B.C., better links between temporary and permanent immigration and greater provincial involvement in the selection of skilled immigrants are required. B.C. will continue to work with the federal immigration authorities to expedite and better target existing foreign worker programs and examine initiatives to provide British Columbia employers with more effective and reliable access to skilled workers. iii. Maximize the skills and knowledge of Asia Pacific immigrants living in B.C. Skilled immigrants will be the key source for labour force growth in B.C. While many arrive with training and experience in sectors where shortages exist, they remain under-utilized due to barriers in the foreign credential recognition system and other hurdles that foreign-trained workers must overcome. This under-utilization has become more acute with the increased skill level required for most jobs and with the change to predominantly Asia-Pacific source countries for new skilled workers. 34 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

35 The province will expand the Provincial Nominee Program and work with the federal government to improve and streamline temporary foreign worker policies. iv. International education opportunities in the Asia Pacific. In a global economy, a long-term commitment is needed to ensure that B.C. s education and postsecondary systems equip our youth with the intercultural skills and competencies they need to become Canada s global citizens of tomorrow. Many Asian countries have proactive policies that provide their youth with educational opportunities around the world to enable them to bring their skills and knowledge back home. Providing similar opportunities for B.C. s youth, such as adding an Asia Pacific component to the One World Scholarship Program, will provide similar benefits for B.C., including increased cultural and business knowledge and language skills to compete in the Pacific Century economy. v. Ensure British Columbia s K-12 students have the skills for the Pacific Century. B.C. s education system is already one of the best in the world. One of the Province s Five Great Goals is to make B.C. the most educated and most literate jurisdiction on the continent. In this global economy, literacy means more than just the ability to read and write in English. Those who will be successful will be multilingual, and be culturally fluent. The Asia Pacific Initiative will support this goal by ensuring that B.C. s K to 12 curriculum prepares our youth to compete in a Pacific Century global economy by undertaking a K to12 Asia Pacific curriculum review with recommended Asia Pacific enhancements by STRATEGY 4: EXPECTED RESULTS» Annual number of skilled worker approvals through Provincial Nominee Program to double by 2009.» 2500 new graduate spaces for masters and doctorate degrees, and 7,000 more apprenticeship spaces by 2010.» Increase in the number of immigrants with specific skills required to 20,000 per year through 2015.» Increase off-campus and postgraduation employment to help retain foreign students and integrate students into the provincial economy.» Increase in the annual number of new Temporary Foreign Worker applications by 50 per cent to 24,000.» Increase in the number of new immigrants bridged into jobs which match their skills.» Increase in the number of students enrolled in Mandarin and other Asian languages in B.C. by 30 per cent by STRATEGY 5 ASIA PACIFIC DESTINATION B.C. is Canada s Asia Pacific province and has the credentials and potential to become an Asia Pacific hub. To become a truly North American centre for the Asia Pacific, we need to build critical mass and a reputation as a centre of excellence for the Asia Pacific. A vibrant commercial gateway is more than just gateway infrastructure. It is also about the people, businesses, and culture around the entrance. To become a gateway destination, B.C. must build on its strengths and cultural linkages to make the province a leading destination for Asia Pacific tourism, trade, education and training, research and innovation, partnerships, and business and financial services. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 35

36 ASIA PACIFIC INITIATIVE STRATEGY 5: ACTIONS i. Accelerate implementation of the Asia Pacific component of the BC Tourism Strategy. A B.C.-Asia Pacific focus is needed to continue developing quality services, tourism experiences and target marketing that are geared towards specific Asian markets. This is especially critical for China, given forthcoming Approved Destination Status for Canada from China. The B.C. Tourism Strategy should include conducting the necessary research to identify market trends and preferences and to promote B.C. as an Asia Pacific destination of choice. If B.C. is to capture this opportunity, significant streamlining of the federal government s visa approval process for Asian visitors is critical. ii. Establish B.C. as the preferred international education destination for Asia Pacific students. One of B.C. s most exceptional economic assets is our education system. Education continues to be in high demand in Japan and South Korea and is a key growth sector in both China and India, not only for kindergarten to Grade 12 and post-secondary partnerships, but for community colleges, private business schools, and private sector institutions. Our post-secondary education system must also be showcased. Establishing B.C. as an international study destination will lead to not only increased Asia Pacific research partnerships and alumni networks, but the potential for Asia Pacific students to choose to live, work and invest in B.C. Facilitating this opportunity will require changes to existing federal immigration regulations. B.C. will work with the federal government to ensure that Asia Pacific students are encouraged to stay in Canada to contribute their skills to the Asia Pacific Initiative. iii. Increase cultural awareness and linkages with the Asia Pacific across B.C. B.C. needs to build awareness of its role in the Asia Pacific region and in the role it will play in the economic future of communities across the province. The province will develop and implement an Asia Pacific cultural program to expand multicultural activities and initiatives across the province to promote and celebrate B.C. s position as North America s Asian capital, and incorporate B.C. s Asia Pacific heritage and linkages as part of B.C. s sesquicentennial celebrations in MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

37 iv. Position B.C. as an international business, innovation, and commercialization destination in Asia Pacific. Canada has one of the world s most sophisticated and stable banking systems, as well as supporting business services in the world. B.C. as the Pacific Gateway between Asia and North America has the opportunity to develop into a significant financial and business services destination for Asia Pacific commerce. Communicating and levering B.C. s unique Asia Pacific strengths to attract Asia Pacific businesses and multinational companies will create jobs and increase B.C. s financial and trade linkages. The province invites ideas to expand the range of activities currently available under federal legislation governing Vancouver s International Banking Centre and provincial legislation governing the British Columbia International Financial Centre. Accompanying the growth of Asia s emerging economies is an increased demand for business meetings and events. With the completion of major facilities such as the Vancouver Convention Centre Expansion project, B.C. will be an optimum location for meetings, conventions and events that bring North America and the Asia Pacific regions closer together. The Province will also take action to increase the competitiveness of B.C. in attracting and retaining head offices. This will include exploring how creative tax policy can make B.C. a more attractive place for head offices. B.C. will also market the provinces superb quality of life, well-managed accessible ports and excellent air links to Asia Pacific investors and corporate decision-makers. v. Position B.C. as a knowledge transfer and research and development destination. B.C. has much to offer in innovation intensive industries, such as health sciences, environmental services, biotechnology, hightech, new media, and engineering. B.C. s researchers, institutions and companies have developed new technologies, creative work practices, entrepreneurial leadership, intellectual property management, and marketing of goods, services and new products to improve the quality of life for Canadians and people around the world. By building more research and innovation partnerships between B.C. universities, business developers and entrepreneurs and the Asia Pacific entrepreneurs, B.C. has the potential to assist and support new Asian markets with productivity challenges as well as the health and social challenges associated with their rapid growth. This opportunity will require encouraging more Asia Pacific investment into research and business development in B.C. To encourage these partnerships, the federal government must review its private equity capital tax rules to allow more Asia Pacific investment in the commercialization of Canadian research. STRATEGY 5: EXPECTED RESULTS» The number of Asia Pacific visitors to B.C. doubled by 2015 from 750,000 to 1.5 million;» The number of long-term Asia Pacific students studying on visas in B.C. increased by 20,000 students by 2010 and 75,000 by 2020;» Vancouver is recognized as an International Finance Centre for Asia Pacific commerce by 2015;» Asia Pacific foreign direct investment into university research and commercialization programs increased;» B.C. is the leading Asia Pacific jurisdiction in which to convert research ideas into viable commercial opportunities;» B.C. is a destination of choice for international conferences, meetings and collaborations that bring together experts, researchers and leaders of North America and the Asia Pacific. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 37

38 MOVING FORWARD The Asia Pacific Initiative is about all of Canada working together to take advantage of B.C. s Pacific Gateway location. 38 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

39 MOVING FORWARD B.C. has a highly diverse natural environment, population, and economic base. The province s innovative and skilled workforce, rich natural resources, unrivaled quality of life, and gateway location between North America and Asia provide the foundation for boundless economic opportunities. If we seize these opportunities and capitalize on our unique place in the Pacific Century, then all Canadians will benefit. If we advance a coordinated, consistent and sustained national strategy to realize Canada s true potential as a Pacific nation, then every Canadian will prosper. In order for us to realize these unprecedented opportunities, the Asia Pacific must be a national priority. We need to open up Canada s Pacific Gateway from B.C., right across our country, and build upon our strategic advantages for all Canadians. But we must act now. We must promote a consistent and compelling global identity as Canada s Pacific Gateway for trade, commerce and immigration that is synonymous with quality, service, and value. We must differentiate our province from competitors and create connections that lead to longterm relationships in Asia. We must open up our ports, airports and transportation arteries, to take full advantage of our strategic global position and make B.C. the world s Pacific Gateway to, and from, North America. We must integrate B.C. into Asian economies by encouraging mutually beneficial investment and expanding market opportunities based on B.C. s strengths with Asia s most pressing needs. We must develop an Asia Pacific gateway culture in B.C. - the people, services and supporting government policies - to make our province the most desirable destination for Asia Pacific business, investment, education and tourism. We must rally our schools, universities, colleges and businesses to attract new workers, keep those we have, and increase their skill levels to remain competitive in the Pacific Century economy. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 39

40 MOVING FORWARD Now is the time for British Columbians to start our journey to become closer international friends and partners with countries in the Asia Pacific. Over a century ago, Canada s national railway was created because the government of the day had a vision to unite the country. Those who came to B.C. on that railroad had a vision to build more than just a new country. They saw a future of limitless opportunity. We have arrived yet again at a point in history where we can make that vision our reality. The future of B.C. will be defined by what we do now, and by how we approach this unprecedented opportunity before us. So let us now begin to work together so that in the future our children will look back and thank our political and business leaders for their bold and decisive actions and their extraordinary vision. 40 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

41 APPENDICES Appendices Appendix A Asia Pacific Market Profiles 42 Appendix B Performance Indicators and Economic Impacts 56 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 41

42 APPENDIX A ASIA PACIFIC MARKET PROFILES This appendix is based on several sources including: Ministry of Economic Development, Asia Pacific Trade Council Secretariat Economist Intelligence Unit Country Profiles, 2006 Asia Pacific Foundation - Market Opportunities for B.C. in Asia Pacific Statistics Canada (Strategis) Note: There is no provincial data available with respect to international trade in services or inward/outward flows of foreign direct investment. Asia is a diverse and rapidly changing region consisting of more than twenty countries and 60% of the world s population. The majority of production, consumption and capital accumulation occur in Japan, China, South Korea, India, Taiwan, Hong Kong and the major markets of Southeast Asia - mainly in Singapore, Malaysia, Thailand, Indonesia, Philippines and Vietnam. Asian economies are projected to grow at an average annual rate of 4.9% to This compares with U.S. economic growth of 2.9% a year and world average growth of 3.5% as shown in Exhibit 8. Both developed markets including Japan, South Korea, Hong Kong and Taiwan, and emerging markets such as China and India are driving global demand and supply. Asia is now a major exporter of manufactured goods as well as a large consumer of energy and other natural resources that must be imported from other parts of the world. Asia comprises many different markets with differing demographic, economic, cultural and political characteristics. Regions within one country are often at different stages of economic development. Significant disparities exist in income and living standards. On a per-capita basis, many parts of China, India and Southeast Asia are far poorer than the western world. A significant proportion of Asia s population lives outside cities as shown in Exhibit MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

43 » EXHIBIT 8 ECONOMIC PROFILE 2005 GDP 2005 GDP at GDP per Capita Real GDP Growth PPP Market Rates Market Rates Historic ( ) Projected (US$ bn) (US$ bn) (US$) (%/yr) ( ) Japan 4,008 4,617 36, China 8,200 2,225 1, S.Korea 1, , India 3, Taiwan , Hong Kong , SE Asia 2, , Asia 20,375 9,731 U.S. 12,457 12,457 42, World 61,078 44,433 6, Source: The Economist, 2006; CIA World Fact Book, Asia Pacific Foundation. SE Asia includes Indonesia, Singapore, Thailand, Philippines, Malaysia and Vietnam» EXHIBIT 9 MAJOR ASIAN MARKETS (POPULATION & PERCENTA GE OF POPULATION LIVING IN CITIES) South Korea 48m 80% Japan 128m 79% China 1.3bn 37% Taiwan 23m 78% India 1.1bn 28% Thailand Philippines Malaysia Singapore Southeast Asia 485m 40% (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.) Indonesia M I N I S T R Y O F E CO N O M I C D E V E LO P M E N T :: B R I T I S H CO LU M B I A A S I A PA C I F I C I N I T I AT I V E 43

44 APPENDIX A ASIA PACIFIC MARKET PROFILES» CHINA AND HONG KONG Population: China 1.3 billion Hong Kong 6.9 million CHINA Beijing Guangzhou Hong Kong Shanghai Main cities: Shanghai (9.9 million) Chongqing (6.6 million) Beijing (Peking, capital, 7.6 million) Tianjin (5.3 million) Wuhan (4.4 million) Guangzhou (4.4 million) Languages: primarily Mandarin. Hong Kong is mainly English and Cantonese» CHINA/ HONG KONG MERCHANDISE TRADE TRENDS B.C. Canada Million nominal CDN$ Exports Imports Total Trade Exports Imports Total Trade ,770 2,564 4,019 7,605 11, ,686 8,614 10,300 8,491 34,986 43,477 Annual Growth (%) Note: imports are from China and Hong Kong through B.C. GDP (2005, US$): China, $2,512 billion or $7,600 per capita; Hong Kong, $187 billion or $36,500 per capita B.C. merchandise export market share (2004): China 0.20%; Hong Kong 0.09% B.C. share of Canada-China trade (2006): 20% (15% share of Canada-Hong Kong trade)» OPPORTUNITIES IN CHINA Main Economic Opportunities» Wood and building products» Metals and minerals» Clean energy and environmental technologies» Niche manufacturing opportunities» Transportation via B.C. s Pacific Gateway» Seafood products»new media» Emergency response technology» Source for skilled labour and temporary foreign workers Services Sector Opportunities»Education services» Collaboration on 2008/2010 Olympic planning» Expertise lent to Shanghai in planning for 2010 World Expo» Public and private R&D investment in biotechnology and materials science» Travel and tourism services» Real estate consulting services 44 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

45 CHINA AND HONG KONG PROFILE AND SECTORAL HIGHLIGHTS Canada s interactions with China date back to the early 20th century, but in contemporary times stem from the opening of diplomatic relations between the federal government and its counterpart in Beijing in China is now an emerging economic power and is Canada s second largest source of immigrants and the largest supplier of imports. Two-thirds of China s GDP is generated from trade activities and there is a focus on making over 100 state owned companies into global competitors. This presents B.C. with the challenge and opportunity of building a sustained presence in China to foster stronger commercial relations. Canada and B.C. have mature trade relations and connections with Hong Kong and Guangdong Province which can be used as a beachhead for advancing commercial relations with the rest of China. The forthcoming 2008 Summer Olympics and Paralympics in Beijing and 2010 Winter Olympics and Paralympics in Vancouver also present a timely and unique opportunity to promote two-way trade and investment relations.» Wood and building products: China s traditional reliance on concrete building structures and legislation that prohibits wood housing for large residences are challenges for Canadian firms. However, with more than 12 million housing starts a year, the opportunity is huge. B.C. lumber exports to China were $36 million in 2004 versus $1 billion to Japan.» Metals and minerals: China s demand for mineral resources has been doubling roughly every 10 years. There are opportunities both for foreign investment in B.C. s mining sector and to promote our exploration expertise and financing and technical capabilities.» Manufacturing and technology: Given China s manufacturing cost advantage, B.C. needs to identify niche manufacturing opportunities within the supply chain. For instance, Vtech, one of the largest manufacturer of cordless telephones and educational toys, employ R&D personnel in B.C. to support product development.» Biotechnology: The Chinese market for pharmaceutical products is expected to triple from its current size of about $34 billion. This presents opportunities for B.C. companies to expand exports of Chinese herbs, medicines and other products.» Education: Hong Kong is B.C. s and Canada s biggest investment destination after China. Hong Kong is a good platform for expansion into China. The growth markets of the future will be e-learning and software development. Hong Kong is also one of the top sources of students from Asia. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 45

46 APPENDIX A ASIA PACIFIC MARKET PROFILES» JAPAN Population: 127 million» MERCHANDISE TRADE TRENDS B.C. JAPAN Tokyo Yokohama saka Canada Million nominal CDN$ Exports Imports Total Trade Exports Imports Total Trade ,002 4,463 10,465 11,044 12,551 23, ,706 5,113 9,819 9,248 15,334 24,582 Annual Growth (%) Main cities: Tokyo (capital, 8.5 million) Nagoya (2.2 million) Yokohama (3.6 million) Sapporo (1.9 million) Osaka (2.6 million) Kyoto (1.5 million) Language: Japanese GDP (2005, US$): $4,911 billion or $33,100 per capita B.C. merchandise export market share (2004): 0.74% B.C. share of Canada-Japan trade (2005): 51% Note: imports are from Japan through B.C.» OPPORTUNITIES IN JAPAN Main Economic Opportunities» Forestry, pre-fabricated homes and building products» Fisheries and seafood products, agri-foods, food and beverages» Clean energy and aluminium» Biotechnology, new media, Information and Communication Technology» Investment in mining and mineral resources Services Sector Opportunities» Accounting, Legal and financial services»engineering»tourism»education»insurance»software licensing 46 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

47 JAPAN PROFILE AND SECTORAL HIGHLIGHTS Japan is by far the largest economy in the region, and is well-known for its focus on innovation and technology, product and service quality, and large venture capital market. B.C. has long-standing and well established trade and investment relations with Japan; our largest export market in Asia. Japan also accounts for the largest amount of foreign direct investment by any Asian nation in Canada. Though Japan is a mature market for B.C., there is considerable opportunity to reinvigorate trade and investment relations following their recent rebound from the economic downturn in the 1990 s. Japan is not only our largest market in Asia; it also plays a key role in many Asia Pacific supply chain arrangements. Forestry and pre-fabricated homes: Lumber is B.C. s major export to Japan and has a long established history in the market. B.C. forest products exports have been eroded by competition from Scandinavian countries that have exploited the market by better understanding the market needs. There are about 80 to 100 B.C. firms involved in the sale of prefabricated homes to Japan. High technology: More than 60 B.C. high technology companies are active in Japan in areas such as fuel cells, biotechnology, robotics, aerospace, and defense. There is a growing interest in this sector in Canada because our technology image has improved through the work of the Team Canada missions. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 47

48 APPENDIX A ASIA PACIFIC MARKET PROFILES» INDIA Population: 1.1 billion New Delhi INDIA Mumbai Kolkata» MERCHANDISE TRADE TRENDS B.C. Canada Million nominal CDN$ Exports Imports Total Trade Exports Imports Total Trade , ,529 1,918 3,447 Annual Growth (%) Note: imports are from India through B.C. Main cities: Mumbai (Bombay, 16.4 million) Kolkata (13.2 million) Delhi (12.8 million) Chennai/Madras (6.4 million) Bangalore (5.7 miliion) Hyderabad (5.5 million) Language: Hindi is the national language and primary tongue of 30% of the population; there are 14 other offi cial languages; English is widely used in business and as a second language GDP (2005, US$): $796 billion or $3,700 per capita B.C. merchandise export market share (2004): 0.14% B.C. share of Canada-India trade (2005): 23%» OPPORTUNITIES IN INDIA Main Economic Opportunities» Information and Communications Technology, biotechnology and software» Mining, mineral ores, and energy»forest products» Source for skilled labour and temporary foreign workers»tourism Services Sector Opportunities» Information and Communications Technology»Environmental services»mining services»engineering consulting»trade support» Medical services and equipment 48 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

49 INDIA PROFILE AND SECTORAL HIGHLIGHTS India presents B.C. with the next largest emerging trade and investment opportunity in Asia. India is Asia s fourth largest market. As an emerging market opportunity for B.C. and Canada, India has a number of attractive attributes, including:» English is an offi cial language and is commonly used in business; Commonwealth history and connections to Canada;» legal protection of intellectual property;» a legal system based on the common law tradition; and» multi-culturalism. India s economy expanded at an average rate second only to China over , and its emergence as a growing market opportunity has been driven by its abundance of qualified information and communication technology professionals. In a short period of time, India has become a crucial part of certain global services supply chains and has a relatively young population and a fast-growing middle class. The large size of the Indian diaspora in Canada, and B.C. in particular, suggest great potential for developing even stronger economic linkages. Forest products: Pulp and paper accounted for two-thirds of B.C. s exports to India in 2005, or $120 million. Per capita consumption of paper in India, is one of the lowest in the world, is expected to increase with literacy rates and economic growth. Services trade: B.C. has a dynamic relationship with India and this sector is expected to be one of the fastest growing, particularly in Information and Communication Technology and consulting services such as engineering, legal services, travel and immigration, real estate development and construction services. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 49

50 APPENDIX A ASIA PACIFIC MARKET PROFILES» SOUTH KOREA Population: 49 million Seoul SOUTH KOREA Busan Main cities: Seoul (capital, 10.3 million) Daegu (2.5 million) Busan (3.8 million) Daejeon (1.4 million) Incheon (2.6 million) Language: Korean GDP (2005, US$): $768.5 billion or $24,200 per capita» MERCHANDISE TRADE TRENDS B.C. Canada Million nominal CDN$ Exports Imports Total Trade Exports Imports Total Trade B.C. merchandise export market share (2004): 0.35% B.C. share of Canada-South Korea trade (2005): 43% ,556 2,985 2,838 5, ,365 1,658 3,023 3,189 5,763 8,952 Annual Growth (%) Note: imports are from South Korea through B.C.» OPPORTUNITIES IN SOUTH KOREA Main Economic Opportunities» Information and Communications Technology, biotechnology, new media, film/tv and video gaming»educational services»tourism» Wood products» Seafood products» Transportation and logistics» Source for skilled labour and temporary foreign workers Services Sector Opportunities» Travel and tourism»financial services» Information and Communications Technology»Education services 50 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

51 SOUTH KOREA PROFILE AND SECTORAL HIGHLIGHTS South Korea has emerged as a major manufacturing economy dependent on international trade and energy imports. South Korea accounted for over one-third of Asia Pacific students coming to Canada, presenting an opportunity to leverage further educational services opportunities, and trade and investment opportunities. Tourism is also a current and prospective growth opportunity. South Korean companies are part of production supply chains that link other Asian economies with North America. While South Korea presents B.C. and Canada with some upside trade and investment opportunities over the mediumterm, in the short-run trade will likely continue to be less than Japan, China and India, where established relationships exist and emerging opportunities are more immediate. Canada is negotiating a free trade agreement with South Korea that is expected to create opportunities in the agricultural, financial services, high-tech and electronics sectors for Canadian and B.C. businesses. Transportation: South Korea is a major air and marine hub for the Chinese market. It has advanced container handling systems and rail connections into northern China. B.C. could develop transportation linkages with South Korea to gain access to local and Chinese markets. Educational services: There is market potential for elementary, high school and university level education. Opportunities also exist in English-as-a secondlanguage programs to satisfy the growing demand of Koreans who relocate to B.C. and other parts of Canada for their education. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 51

52 APPENDIX A ASIA PACIFIC MARKET PROFILES» TAI WAN Population: 23 million Main cities: Taipei (2.6 million) Taichung (1.0 million) Kaohsiung (1.5 million) Tainan (0.75 million) Languages: Mandarin, Taiwanese, Hakka Kaohsiung Taipei TAIWAN GDP (2005, US$): $354 billion or $29,000 per capita B.C. merchandise export market share (2004): 0.28%» MERCHANDISE TRADE TRENDS B.C. Canada Million nominal CDN$ Exports Imports Total Trade Exports Imports Total Trade B.C. share of Canada-Taiwan trade (2005): 40% ,047 1,576 3,475 5, ,384 1,308 3,877 5,185 Annual Growth (%) Note: imports are from Taiwan through B.C.» OPPORTUNITIES IN TAIWAN Main Economic Opportunities» Information and Communications Technology»Environmental technologies» Emergency response technology» Wood products» Seafood products» Electronic and electrical equipment/machinery» Medical services and health care» Venture Capital and Technology Investment Services Sector Opportunities» Business consulting» Accounting and legal services»travel»transportation 52 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

53 TAIWAN PROFILE AND SECTORAL HIGHLIGHTS Taiwan has a relatively small domestic market relative to other Asian countries, and exports have provided the main impetus for industrialization. It is a sophisticated venture capital hub, sometimes referred to as the Silicon Valley of Asia. Since joining the World Trade Organization (WTO) in 2002, Taiwan has undertaken significant reforms and liberalization to meet WTO requirements. As a result, market access has improved for several goods of interest to B.C. and Canadian exporters including pharmaceuticals, paper, agricultural, agri-food, and seafood products. Information and communications technology: Taiwan has a high proportion of broadband Internet users and ICT is an area where there are significant opportunities. The Taiwan government also encourages ICT demand and development as part of its national development plan, with the goal of becoming a key location in Asia for advanced ICT manufacturing and R&D. Wood products: Pulp, wood and paper products account for about 40 per cent of B.C. exports to Taiwan and exporters consider it to be one of the better emerging market prospects. Electrical machinery and equipment: This sector will play an increasingly important role as Taiwan continues to advance as a technology-intensive, automated economy. B.C. has been Canada s top exporter in machinery and equipment to Taiwan. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 53

54 APPENDIX A ASIA PACIFIC MARKET PROFILES» SOUTHEAST ASIA Population: 513 million Main countries: Singapore (4.4 million) Malaysia (24.3 million) Thailand Vietnam Malaysia Philippines Philippines (89.5 million) Indonesia (245.5 million) Thailand (64.6 million) Vietnam (84.4 million) Singapore Indonesia GDP (2005, US$): $880 billion B.C. merchandise export market share (2004): 0.1%» MERCHANDISE TRADE TRENDS B.C. Canada Million nominal CDN$ Exports Imports Total Trade Exports Imports Total Trade B.C. share of Canada-SE Asia trade (2005): 18% ,151 1,638 2,908 6,065 8, ,502 2,026 2,891 8,922 11,813 Annual Growth (%) Note: imports are from Southeast Asia through B.C.» OPPORTUNITIES IN SOUTHEAST ASIA Main Economic Opportunities» Environmental products and services,»energy systems» Food and agri-business»forest products» Information and Communications Technology» Infrastructure and building products»mining» Retailing and franchising» Source for skilled labour and temporary foreign workers Services Sector Opportunities»Education services»tourism» Environmental and engineering consulting»commercial services 54 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

55 SOUTHEAST ASIA PROFILE AND SECTORAL HIGHLIGHTS South East Asia is a category for other countries (including Singapore, Malaysia, Thailand, Philipines, Indonesia, Vietnam) that show longer-term promise as emerging market opportunities for B.C. and Canada beyond prime established and emerging market opportunities in Asia (e.g. Japan, China, India, South Korea, and Taiwan). These countries have large middle classes, and sizable service sector economies. Energy: Energy is a promising sector in most Southeast Asian countries as governments catch up with investment following the financial crisis of the late 1990s, and as recent economic growth stimulates demand. Environmental products and services: Important issues in the region are deforestation, water pollution from industries, and air pollution. These offer trade and investment prospects in pollution control and sustainable resource management. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 55

56 APPENDIX B KEY PERFORMANCE INDICATORS AND ECONOMIC IMPACTS KEY PERFORMANCE INDICATORS» OBJECTIVE 1: TRADE AND INVESTMENT Indicator Benchmark Base Year Cargo Indicators Container Trade TEU Million Market Share (%) Value ($billion) Commodity Exports Tonnes (million) Change vs (%) Value ($billion) Market Indicators Goods Exports Market Share 3 B.C. (%) B.C. ($billion) Canada (%) Canada ($billion) Services Exports Market Share B.C. and Canada (%) B.C. and Canada ($billion) Goods Imports Growth Rate 4 B.C. average annual (%/yr) B.C. ($billion) Canada average annual (%/yr) Canada ($billion) Services Imports B.C. and Canada (%/yr) B.C. and Canada ($billion) Foreign Direct Investment Indicators 6 Canadian share of AP inward stock (%) Canadian share of AP outward stock (%) Canadian outward stock in AP, ($billion) Inward stock in Canada from AP ($billion) MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

57 APPENDIX B KEY PERFORMANCE INDICATORS AND ECONOMIC IMPACTS» OBJECTIVE 2: TOURISM, CULTURAL EXCHANGE AND BUSINESS SERVICES Indicator Benchmark Base Year Asia Pacific Visitors YVR passengers (million) Overnight tourism revenue ($billion) OBJECTIVE 3: SKILLS AND EDUCATION Indicator Benchmark Base Year Education #visas for foreign students in B.C. 45,000 65,000 90, ,000 Economic output (B.C.) ($billion) Immigration Level #net immigrants to B.C. 42,000 45,000 45,000 55,000 Economic output (Canada) ($billion) Note: dollar figures are stated in real Canadian dollars 1. Container market share of Pacific Coast, including Canadian and U.S. ports. 2. The cargo value estimates assume constant 2004 values for each commodity applied to B.C. port traffi c projections for the major trading ports based on values for cargo shipped through the Port of Vancouver from the Vancouver Port Authority s economic impact study completed in The values have been adjusted to reflect the estimated Asia Pacific share of overall port traffi c. 3. Export market share refers to the average B.C./Canada share of Asian merchandise imports of China, Hong Kong, Japan, South Korea, India, Taiwan and Southeast Asia. 5. The base year for services imports dollar values is Foreign direct investment indicators relative to the Asia Pacific (AP) are for the same economies per note 3. The base year is The B.C. trade impact includes the estimated economic output (service export) related to those international students studying in B.C. with visas and those without visas (i.e. short-term students). 8. The majority of the job impacts stem from the transportation networks supporting the gateway the ports and connecting inland truck and rail distribution system, as well as the Vancouver International Airport. 4. Import growth rates are the average Asian export growth projections to B.C. and Canada for the same economies identified in note 3 (e.g. average %/yr growth for 2010/04, 2015/10, etc.). The base year for dollar values is MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 57

58 APPENDIX B KEY PERFORMANCE INDICATORS AND ECONOMIC IMPACTS ECONOMIC IMPACTS improvement and immigration objectives. The methodology relies on The following economic impact a combination of existing economic estimates are based on achieving the impact assessments and studies, as targets for each indicator in the Key well as preliminary market share and Performance Indicator table relative foreign direct investment analyses to existing or base year conditions. between B.C./Canada and the major The economic assessment results illustrate the magnitude of the impacts of achieving the Asia Pacific Initiative s trade and investment, Asian markets. 10 The container port traffi c projections are consistent with the B.C. Ports Strategy and the Pacific Gateway Strategy Action Plan (2006). tourism, education and skills» ECONOMIC IMPACTS : CANADA Gateway Jobs (000 s) Trade (C$ Billion) Investment (C$ Billion) Gain Gain Gain Objective In interpreting the above impacts, several key assumptions should be kept in mind:» Gateway jobs refer to the direct employment effects. The main job impacts stem from the transportation networks that support the Gateway the ports and connecting inland truck and rail distribution systems and the Vancouver International Airport.» Trade effects include imports and exports of goods and services and assume that adequate financial, resource, production and logistics capacity exists in Canada to capitalize on future opportunities. Objective Objective Total $102 $333 $231 $40 $82 $42.4» ECONOMIC IMPACTS : BRITISH COLUMBIA Gateway Jobs (000 s) Trade (C$ Billion) Investment (C$ Billion) Gain Gain Gain Objective Objective Objective Total $29 $106 $77 $5.1 $10.5 $ The main studies that were used include: the Port of Vancouver Economic Impact Study; Vancouver International Airport Economic Impact; The Role of International Education (BC Progress Board); Immigration and Trade Creation (Head and Ries, The Canadian Journal of Economics); and Enhancing the Competitiveness of British Columbia (BC Competition Council). The values have been adjusted to reflect the estimated Asia Pacific share of overall port traffi c. 58 MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE

59 APPENDIX B KEY PERFORMANCE INDICATORS AND ECONOMIC IMPACTS» The trade outlook to 2020 is based on long-term GDP projections for Asia Pacific economies from The Economist and corresponding import/export growth rates and relationships derived from World Bank and Statistics Canada data.» Merchandise exports to the Asia Pacific are based on an extension of historical market shares and the assumption that it is possible to meet/ exceed previous market penetration levels. It must be recognized, however, that significant competition exists in Asian markets and Canada can only sell the goods and services we produce that Asian economies demand.» Foreign direct investment impacts are based on historical patterns, conservative yet rising targets, and the assumption of a supportive policy environment within Canada and Asia Pacific economies. The potential employment gain for B.C. from achieving the Asia Pacific Initiative objectives is an estimated 55,000 direct jobs by 2020 for the Gateway as a whole. Of these jobs, about 35,000 are attributable to Asia Pacific activity. It should be recognized that the Gateway also supports a much broader economy in the downstream industries that are suppliers to the Gateway such as the airport retail sector, and major upstream industries such as manufacturing, mining, forestry and agriculture that rely on the Gateway to access international markets. These broader employment impacts could mean another 200,000 jobs in B.C. for a total impact of 255,000 Gateway jobs by 2020 a figure that is more than the total employment in B.C. s manufacturing sector today. For Canada, the direct employment gain by 2020 is estimated to be 70,000 jobs and could reach up to 500,000 jobs if similar upstream and downstream effects are considered. In comparison, Canada s entire transportation and warehousing sector provides 800,000 jobs; agriculture 350,000 jobs; and 300,000 jobs (forestry, fishing, mining and oil and gas combined). The trade and investment effects of the Gateway are also potentially significant. The 2020 gain in goods and services trade is an estimated $230 billion for Canada, of which $77 billion would accrue to B.C. Of this $77 billion increase, $45 billion is associated with increased exports (economic output gain) and $32 billion is in increased imports. The scale of this impact is the equivalent of 50 per cent of B.C. s existing overall trade activity of $153 billion. MINISTRY OF ECONOMIC DEVELOPMENT :: BRITISH COLUMBIA ASIA PACIFIC INITIATIVE 59

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