Canadian Brands Thriving in China as Beijing Removes Roadblocks to Foreign Companies
Chargé D’Affaires, a.i. of the Chinese Embassy in Canada Lan Heping Publishes a Signed Article on Business in Vancouver
29 March 2022
China’s economy got off to a good start in 2021.
China’s gross domestic product (GDP) expanded 8.1 per cent year on year. Total retail sales of consumer goods grew by 12.5 per cent, with the contribution of final consumption expenditure to economic growth reaching 65.4 per cent. The total value of imported and exported goods for the year rose 30 per cent to US$6 trillion. And China’s actual use of foreign capital increased by 20.2 per cent.
China’s economic growth has brought tangible benefits to Canadian enterprises. Iconic Canadian coffee brand Tim Hortons, for example, has opened 400 stores in China in the past three years. After such success and receiving huge investments from investors like Tencent and Sequoia Capital, it is now planning to open at least 2,750 profitable Tim Hortons stores by 2026. In the third quarter of 2021, Canada Goose’s direct-to-consumer sales and e-commerce sales in China increased 35 per cent and 60 per cent year on year, respectively. Athletic apparel maker Lululemon’s sales in China have surged at a compound annual growth rate of 70 per cent over the past two years. The uniform kit it designed for Team Canada went viral on Chinese social media platforms after its appearance at the Beijing 2022 Winter Olympics. Lululemon’s products flew off the shelves in China. In November 2021, 80 Canadian enterprises participated in the Fourth China International Import Expo, ranking among the top 10 exhibitors in terms of the number of exhibits.
中國取得的經濟成就給加拿大企業帶來了實實在在的利益。加拿大“國民咖啡”Tim Hortons僅用3年時間，就在中國開設了400家門店，并獲得騰訊和紅杉資本等巨額投資，計劃到2026年底開設至少2750家可盈利門店。2021年第三季度，Canada Goose在華直營銷售額同比增長35%，電子商務收入增長60%。過去兩年，Lululemon在華銷售額復合增長率高達70%，其贊助的加拿大國家隊服在北京冬奧會亮相后，更在中國網絡社交平臺沖上“熱搜”，產品一度風靡脫銷。2021年11月，80家加拿大企業參加了第四屆中國國際進口博覽會，展品數量位列參展國前十。
These Canadian brands are thriving in China for at least two reasons: First, China’s market is increasingly open and welcoming to business, with fewer roadblocks and more incentives for foreign brands to invest. Second, the domestic market in China is hungry for high-quality and trustworthy branded products, including those produced by Canada.
In 2022, China will prioritize economic stability and pursue progress while ensuring stability. China will apply the new development philosophy in full, in the right way, and in all fields of endeavour, move faster to create a new pattern of development, promote high-quality development, to achieving stable macroeconomic performance and keep major economic indicators within the appropriate range. The main projected targets for development this year are as follows: GDP growth of around 5.5 per cent; over 11 million new urban jobs; CPI increase of around three per cent; steady increases in both the volume and quality of imports and exports; a basic equilibrium in the balance of payments; grain output of over 650 million metric tonnes; further improvement in the environment, and continued reduction in the discharge of major pollutants.
China has announced new policies to promote greater opening up of our economy, and is aiming to promote sustainable growth in foreign trade and investment, while fostering foreign economic and trade cooperation. China hopes these new measures will encourage increased western company participation in China’s markets, including Canadian participation in trade with China. Some of the specific new measures include adopting a package of steps to stabilize foreign trade through incentives and stronger protections for individual businesses. The new measures will also promote deeper economic and trade cooperation, making sure foreign brands can compete on a level playing field with domestic brands in the Chinese market. What this means for Canadian brands is, if you want to sell to Chinese consumers, it has never been easier and safer to do so. From my perspective, Canadian industries including the resource sector, technology, and consumer products could all benefit from the higher-standard opening up of China’s economy.
Of course, China’s opening-up is not a one-person show but open to all parties. From an economic perspective, China and Canada are highly complementary and we share great potential for co-operation. An open Chinese market will indeed offer more opportunities for Canadian enterprises.
China sees great potential in the role of cross-border e-commerce, expanding imports of high-quality products and services, foster innovation-driven development of trade in services and digital trade, and promote a rules-based system for cross-border trade in services. Reforms to simplify customs clearance will be deepened, and the building of an international logistic services system will be accelerated. With a population of 1.4 billion, the vast Chinese market welcomes more high-quality products from Canada. Canada’s provincial and municipal officials have expressed to me many times the hope to expand exports of quality products to China, and these new measures will help achieve that.
In addition to removal of obstacles to cross-border trade, China will further widen market access for foreign investment, revise and enlarge the Encouraged Industry Catalogue, and support more foreign investment in medium- and high-end manufacturing, R&D and modern services, as well as in China’s central, western and northeastern regions. China will also improve services for promoting foreign investment and accelerate the launching of major foreign-funded projects. In addition, China will take tangible steps to expand the scope of pilot free-trade zones and the Hainan Free Trade Port, promote reform and innovation in economic development zones, boost the development of integrated bonded areas and launch more trials on the extensive opening of the service sector. As part of this work, China plans to take significant steps to achieve carbon peak targets and carbon neutrality, implementing an action plan to achieve peak carbon before 2020. Canada can offer significant support in the transition toward low-carbon emissions and green economic development, which is also one of Canada’s key development goals.
Political mutual trust is the basis for developing China-Canada relations. Mutual respect and win-win results are the essences of China-Canada economic and trade cooperation. China formally applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in September 2021 and hopes the Canadian side will offer its support for this application. With China’s participation, the CPTPP would encompass about 30 per cent of global GDP. I believe that the business community will continue to act as a bridge between our two countries, make positive efforts to bring China-Canada relations back to normal as soon as possible, and lay a solid foundation for consolidating and expanding the achievements of our bilateral economic and trade co-operation.