FPAC CEO: Onto China – Reflections from an Asian trade trip Pt. 2

Ben Stewart, BC government’s special envoy to Asia; BC Forests Minister Steve Thomson; BC Forests Deputy Minister Tim Sheldan and Brad Thorlakson, CEO of FPAC member company Tolko, lead our morning meeting with industry reps in Shanghai.

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After a couple of great days of meetings in Tokyo to further build relationships with the Japanese government and consumers, our Canadian delegation's attention shifted to the critical Chinese market – first stop, Shanghai.

This is my first visit to China and I was absolutely awestruck by the sheer scale. With some 25 million people in the Shanghai area alone, it's no wonder that this massive market continues to provide real opportunity for Canadian wood, pulp and paper products.

Canada Wood, our industry's wood export promoters, has been instrumental in supporting export diversification. They have helped move Canadian wood exports to China from 0.2% in 2006 to 13% in 2016 and their support of trade missions like this one have led to improvements to Chinese building codes, raised awareness of the quality of Canadian wood products and enabled the signing of an MOU with the Chinese government to support making buildings here more energy efficient and to improve wood-frame construction.

While annual economic growth in China has slowed in recent years from double digits to just over 6% a year (most countries would only dream of 6%+ of annual growth) the growing middle class and a new focus by the Chinese on building more with wood presents opportunities. Growth for Canadian exporters isn't going to come easy though given the close proximity to the Russian market – and the low value of the Russian ruble which is creating a competitive advantage for them.

Despite Canada's world-leading forest management practices, price will always be a key determinant in the Chinese market. That said, our delegation continues to tell the story of how exceptional our forest management practice regime is in Canada – from company commitments to the laws we follow to the certification programs we subscribe to on top of that. It's a powerful story. And, as China's private sector expands (it now accounts for 2/3 of Chinese GDP), this factor will only grow in importance. We will continue to tell this story and would invite our politicians (I must say that Federal Natural Resources Minister Jim Carr and BC's Forests Minister Steve Thomson have been doing their job in this regard) and environmental partners to do the same. I would stack our industry's on-the-ground efforts and accountability on sustainable forest management to those in competing countries like Russia every day of the week.

One thing that surprised me in our meetings with Chinese government officials and industry representatives – and it's one that Catherine McKenna, our Minister of Environment and Climate Change will see when she comes to China in the days ahead – environmental improvement matters......and that presents an opportunity for more wood in residential and commercial buildings.

In its recent 5 year plan, the Chinese government initiated hard targets for greenhouse gas emissions and will be holding local government leaders to account by giving them key performance indicators to meet. And it's not just a hollow government promise – the Chinese are wanting action. As the middle class here expands and more and more Chinese citizens travel the world, they are seeing by comparison, how poor their environment is. They want to see change and their government is clearly aware of that.

I'm looking forward to our visit to Beijing where we will visit the Canadian Embassy, meet with more Chinese government officials and partake in a conference about combatting illegal logging.

Source: Tree Talk Blog (FPAC)