Team Ontario 2001: An Overview

Premier Mike Harris will lead a Trade Team Ontario delegation of around 150 companies on the 10-day Team Canada mission that departs for China on February 9, returning to Canada on February 18.

The Mission will begin with three days in Beijing, moving on to Shanghai on February 14, before launching the last leg of the mission in Hong Kong on February 16.

China is Ontario’s fourth largest export market. Ontario’s exports to China have grown dramatically since 1998, fuelled primarily by the automotive sector. That year, the province’s exports to China were worth $286 million and they nearly doubled to $476.5 million in 1999.

As a result of AECL’s project at Qinshan and a surge in auto parts exports by General Motors, Ontario exports reached $662 million in the first three-quarters of 2000 -- a 209 per cent increase over the same period in 1999. Total combined Ontario exports to China and Hong Kong were $1.076 billion during this period.

China’s rapid growth presents excellent opportunities for Ontario companies in introducing Ontario expertise and products and services to this expanding market. The recent invitation to China to join the World Trade Organization also presents positive conditions for increased trade.

The sectors that provide the strongest potential for increased sales to the Chinese market include auto parts, machinery, construction materials, environmental related equipment, and biotech/pharmaceutical products. In recent years, Ontario exporters to China have experienced success in exporting synthetic rubber, transmission apparatus and electronic circuits.

Since 1978, China has successfully implemented major economic reforms designed to stimulate growth and improve living standards within a more market-oriented economic framework. As a result, gross domestic product (GDP) has more than quadrupled and industrial growth has posted major gains.

China is extremely rich in coal, iron ore and other minerals. It also has enormous reserves of natural gas and an ever-expanding hydroelectric power output.

China is currently undergoing a decentralization of purchasing and procurement power. Hong Kong became a Special Administrative Region of China in 1997.

Last December, the Harris government launched a global marketing strategy to win more jobs for Ontario in the 21^st century. The strategy will help diversify our trading partnerships beyond the North American market.

The three-part strategy includes an expansion of trade development. Led by Ontario Exports Inc., trade development will be expanded, both domestically and on the ground in key offshore markets, to provide more support for small and medium-sized Ontario exporters. To attract more investment in Ontario companies, Market Ontario's international sales team will be strengthened and will work more target markets. The government will promote Ontario by opening new trade desks in five key foreign cities.

Around 150 Ontario companies are participating in the Team Canada Trade Mission to China. They represent a wide cross-section of Ontario’s economy with experience in telecommunications, information technology, energy, environmental technologies, education, health care, transportation and construction.

These companies have a variety of objectives:

• establishing first contacts with potential buyers;
• learning more about the Chinese market;
• developing agreements with new partners; and
• building on existing ventures.

New and expanded contracts create jobs in Ontario, through increased manufacturing of Ontario-made components, the transfer of innovative technology and the introduction of Ontario products and services directly into the Chinese market. Here are a few examples.

• Toronto's AMR has a controlling interest in two Chinese producers, making it a world leader in rare earths.

• Rare earths are elements that are mined because of their density, high melting points and ability to conduct heat and electricity. They are used in a variety of products, including computer hard drives, fax machines, circuit boards, batteries, fluorescent bulbs and eyeglasses. Most of the known sources of rare earths are found in China.

• AMR has tripled output at its Chinese plants, winning 10 per cent of the worldwide market in its product lines. The firm's rapid growth will create jobs in Ontario, especially for consultants, as AMR incorporates western business practices into its Chinese operations.

• On December 14, 2000, Toronto’s Canaboard Inc. and the Municipality of Zhangqiu entered into a US$100 million contract and joint venture.

• This joint venture company will build and operate a large strawboard manufacturing plant in Zhangqiu. The company believes China has the potential to be a major market for strawboard.

• On this mission, Canaboard will explore ways to co-operate with the government, scout production facilities and factories and look for possible joint venture partners.

• Based in London, Ontario, Cyberteks Design is an internationally recognized dynamic interactive design studio, e-commerce web hosting and on-line marketing company.

• Its President, CEO and Chief Creative Director is 12-year old Keith Peiris. He is an award winning web designer who founded the company in June 1999. Specialties include work in Macromedia Flash, Fireworks and Freehand.

• The company has seven sales offices in the United States and its clients include Interep, that country's leading radio advertising agency. Peiris hopes to diversify his company's exports beyond the North American market.

• Toronto’s GAO Research Inc. is a leading provider of communications software to telecom and electronics companies worldwide.

• It employs 50 specialized engineers. GAO works with industry leaders in communications DSP hardware, and micro-processors such as Texas Instruments, Intel, Lucent Technologies, Philips and Mitsubishi.

• The firm is now licensed to provide software to Personal Digital Assistant manufacturers in China and will be setting up a sales office in Beijing. GAO expects this expansion to create an additional 20 jobs in Ontario and the company sees more potential for job creation in the long term.

• Nortel Networks of Brampton is a global internet and communications leader, with capabilities spanning optical, wireless, local internet and e-business.

• The company was recently awarded a multi-million dollar contract from Qingdao Telecom and Hebei Telecom, regional operators of China Telecom. As well, Henan Telecom has selected Nortel to supply a backbone network across the province, strengthening Nortel's growing leadership position in China. It is expected to be operational in April, bringing the power and bandwidth of the optical Internet to customers in the Henan province through high-quality voice, data and leased bandwidth services. It will also serve as part of China Telecom's national high-capacity broadband network.

• Nortel currently builds the majority of China's 10 gigabits-per-second networks.

• Located in Woodbridge, Royal Group Technologies Ltd. manufactures home improvement, consumer and construction products and is one of North America's largest manufacturers of vinyl building products.

• The company has been involved in the construction of residential housing in China since the mid 1990s. In 1998, production began at an extrusion plant in the Songjiang district of Shanghai.

• Royal Group’s companies in Ontario manufacture various raw materials used in the production process at the Chinese plant. Roughly 20 per cent of the components for construction projects in China that utilize the system are manufactured here.

• Royal Group is exploring opportunities in China to sell other Royal Building products and to distribute building products manufactured by other Ontario based firms.

• Whiting Equipment Canada Inc. of Welland designs and manufactures heavy industrial equipment.

• A recent joint venture between Whiting Equipment Canada Inc.’s wholly owned subsidiary NAMAG (L) Corporation and Zhejiang Tongxiang Coal Mine Machinery Plant resulted in the forming of Zhejian NAMAG Equipment Manufacturing Co. Ltd. The plant is located in Tongxiang City. The purpose of the joint venture is to produce and sell heavy weldments (such as components for metallurgical processes and plants, electric arc furnaces, cranes, and caster components) manufactured in China, using North American technology.

• In addition, Whiting Equipment Canada Inc. and China's BAOSTEEL, the world’s third largest steel company, have agreed to form a consortium to bid on the largest project in BAOSTEEL’s history.

See Also:

• News Release: Team Ontario Working To Create More Jobs - February 7, 2001