China trade mission about building relationships, Vaughan officials say

YorkRegion.com
July 2, 2015
Adam Martin-Robbins  

The city is embarking on its fifth trade mission to China this fall and officials are confident it will bear fruit.

“I think we’re very serious about this and we are trying to attract those types of business who are truly wanting to reach out globally to China to expand their businesses,” said Concord/North Thornhill Councillor Sandra Yeung Racco, who is leading the trade mission.

“We’ve had a lot of interest from various cities within China who have been basically knocking on our doors, wanting to come in and wanting to learn more about Vaughan and coming in to invest in Vaughan. So we feel this is the right time to do it.”

To that end, the 10-day trade mission slated for October will include representatives from eight to 10 businesses, three city staffers, Yeung Racco and East Woodbridge Councillor Rosanna DeFrancesca.

The mission will see participants visit and meet with government officials in five major cities: Beijing, Shanghai, Yangzhou, Nanjing and Hong Kong.

The goal is three-fold: trying to get China-based businesses to set up shop in Vaughan; to help local businesses break into the Chinese market; and to create government-to-government connections, according to Jennifer Ladouceur, Vaughan’s director of economic development.

The local businesses seeking to take part in the trade mission are being vetted to ensure the trip is a good fit for them, will add value to their operations and that they fit within the “innovation, research, conversion sector,” Ladouceur said.

That means it could include a mix of firms from areas such as information technology and advanced manufacturing as well as academics.

Unlike the city’s previous trips to China, this one will follow the model the city used during its last trade mission to Israel, which included pre-mission and post-mission consultation to thoroughly prepare the companies going on the trip and help facilitate follow-up opportunities.

The city has also enlisted a consultant based in China to find businesses that are a good match for the firms coming from Vaughan and to help with the follow-up.

“Unlike any other market, there is no way you’re going to get a business deal or opportunity done the first meeting. You really have to build and establish a solid relationship and so we’re trying to work on advancing that,” Ladouceur said.

“It’s not just about the relationship, it’s about the trust,” Yeung Racco added. “One thing about the culture in China, which is different from some of the other countries, is you need to build that trust before you can even build a relationship. So having these types of trade missions where it’s government-led and where businesses can come with us, it opens doors for them.”

The budget for the trip has been set at $40,000.

The businesses participating in the mission are responsible paying their costs.

Ladouceur said the city has already seen some success from previous missions during the last seven years, pointing to Ionada Canada, a local firm that develops marine exhaust gas cleaning technology designed for use by large ships and ocean liners.

The firm had made some connections in China, but was having trouble closing a deal until the city came in and helped provide support, she said.  

Other firms that have benefitted from the city’s trade missions include Sungrow Canada, a subsidiary of Sungrow Power Supply Co. that established its North American headquarters in Vaughan, as well as Door Components Canada and Vineland Estates Winery, Ladouceur said.

Another sign that the trade missions are starting to pay dividends is the steady stream of delegations coming to Vaughan from China, she noted.

“This isn’t a quick to market approach,” she said. “We really have to build and establish these relationships so that we can introduce our businesses to the right people. By having them come and visit us regularly, it really shows that we’ve been identified as a lead in this market.”

The city’s slow and steady approach combined with the fact it’s already had some success attracting investment from China could bode well for the future, according to Lorna Wright, executive director of the Centre for Global Enterprise.

“China, as almost every other country in Asia with very few exceptions, is very much relationship based and you don’t build a relationship by going over on one trade mission and having a meeting and you don’t go back again. So the fact Vaughan has gone out three or four times is a good thing,” said Wright, who holds the EDC Professorship in International Business at the York University’s Schulich School of Business.   

“The other thing is things start slow, but can snowball,” Wright added. “For example, if a company has come from China and has set up in Vaughan and it’s having a good experience, if it’s making money and feels this is something that can really help to expand, that information gets back to China. Again, in a relationship-based society, you’ve got all kinds of networks and news gets back, good or bad. And so, if it’s good, you can, over the next couple of years, see more companies coming.”