Business opportunity from China knocks beyond resources – Vancouver Sun

Technologies CEO Jonathan Wilkinson made his first business trip to China thinking he would talk about business.

The trip was to meet his company’s joint venture partners in a project where the Vancouver company was applying its waste water recovery technology to the Chinese mining industry.

What Wilkinson discovered, is that he drank a lot of tea and ate a lot of food.

It was all about the Chinese partners getting to know him.

Wilkinson had done business in Asia before, specifically in Japan. He expected it would be the same in China. It was not.

“It’s much more about spending time, having conversations, building relationships, and building trust. Once you get to that, then you can do business. But until you get to that, it’s very hard to do business.�

“In North America, it’s the contract that’s the most important thing. The contract has to be right, the contract has to be perfect, and then you rely on the contract. In China, it’s a little looser. Yes, you develop contracts, but you rely way more on the relationship in terms of how things get done.�

BioteQ is one of hundreds of medium-to-small-scale B.C. companies forging trade relationships with China.

From wanting quality wooden floors to eating B.C. cherries, newly affluent Chinese are wanting the finer things in life for their homes and tables. Even red B.C. table wines are showing up on the shelves of high-end wine shops.

And for those companies developing the expertise to sell their products in China, the opportunities appear unlimited.

By 2020, almost 400 million Chinese people will have disposable family incomes of between $16,000 and $34,000 a year, almost matching the U.S., where it is $36,000 a year, according to a 2010 study by McKinsey and Company.

The study identified 22 city clusters within China, each large enough and homogeneous enough to be one market for strategic decision-making. It is in these clusters where most of the affluent live and where discretionary spending is rising the fastest.

B.C. companies like Canfor Corp. that are moving up the value chain with the wood products they sell in China are already focusing on city clusters, developing distribution systems to sell their products in the inland clusters.

The province’s resource companies account for most of B.C.’s exports to China — $4.96 billion of $5.75 billion worth of exports B.C. sent to China in 2012 — but there is a growing trade in technology such as BioteQ’s recovery systems, other value-added goods, and even fruit and seafood, which is being sent by air freight and sea.

B.C. exports to Hong Kong account for an additional $218 million on top of the China total.

Also, many of the services B.C. exports — such as BioteQ’s design work on water treatment systems — do not pass through ports so do not show up in the trade statistics. It is difficult to say exactly what IT, education and other services add to the province’s total export figure with China, but the federal Department of Foreign Affairs and International Trade estimates Canada’s total trade in services with China was $1.44 billion in 2010.