By Michael Darch

Hong Kong’s position in Asia has undergone a significant shift over the past decade or two. Once a major manufacturing centre, most of that activity has shifted to the mainland. But Hong Kong remains the logistical and financial hub of Asia. Although its population is only 7 million, it is within 5 hours of half the population of the world - much like the relationship of Ottawa’s population to that of North America.

It remains a major centre for exports and has some 6,440 foreign companies, the Asian head quarters for many.

We got the usual talk on “Why do business with China through Hong Kong?”: strong legal framework, less risk, flexibility, world class infrastructure, low taxes and a solid banking and finance infrastructure. The quote used was “Do your business in Guangdong but sign your agreement in Hong Kong.” Interestingly, most of the conversation related to the Pearl River Delta (PRD), as opposed to China as a whole. The dynamics keep shifting.

But one statistic grabbed me and was clearly the best reason to look to Hong Kong if you are interested in the Chinese clean technology/energy market. Ownership of some 80,000 factories in China rests in Hong Kong. The factory may be in China, but the financial decision making is in Hong Kong.

The Hong Kong Productivity Council had another compelling reason. Last week they released the details of a new program to facilitate Hong Kong owned factories in the PRD to reduce air emissions and enhance energy efficiencies, the Cleaner Production Partnership Programme. This HK$93M program over 5 years helps fund improvement assessment, demonstration projects and verification of the effectiveness of projects, with most of the funds going to demonstration.

So, how did the team do in Hong Kong? First, we almost didn’t make it. Our 1 p.m. flight left the Beijing airport at close to 11 p.m. The new Beijing airport is beautiful, but after 12 hours, the excitement grows a little thin. At one time, it almost looked like the passengers were going to riot. Seeing the crew leave the airplane didn’t help.

Angry passengers in the Beijing Airport.

Picture this: 12 hours sitting in an airport, arriving at your hotel room around 3:30 a.m. and then getting on the Hong Kong subway right in the middle of morning rush hour. To us North Americans who demand our personal space, the Hong Kong subway during rush hour is not the place to be. There were five of us, and when the subway doors opened, no room for one of us never mind five. We were running late, so in we went. As I said, you had better like being very, very up-close and personal with what are now a hundred of your closest and most intimate friends.

Once again our China project manager Sophie Chen and our Consulate Office had got it right. We altered our format slightly to a briefing on the market, a roundtable discussion with some key local associations and senior executives and then a networking lunch session followed by one-on-one meetings. Both our universities and the three companies with us for our last stop were extremely pleased with the quality and relevance of the information and meetings. Once again expectations were far exceeded. This was not an exploratory mission, solid leads were qualified.

Ra’ed Arab trying to close a financing deal.

Yours truly checking out a potential OEM.

Tomorrow, home at last. I will admit, given the amount of snow this winter, we quickly checked home to make sure that it was really 22ºC and not snowing.

Is China serious about clean technology and clean energy? If this mission is any indication, you bet!

Thanks to all our partners in China for making this mission a success. Thanks to Foreign Affairs and International Trade Canada for their financial support through the Community Investment Support and Going Global Programs. Thanks to the University of Ottawa, Carleton University, Thermal Energy, Quadra Solar, CRTek, Canadian Windfields and Venture Coaches for joining us on the trip and making such a strong impression at every stop. Finally, I would like to thank Sophie Chen for putting this all together, suffering through planning with a 12 hour time difference and herding us to success on the road in China.

(Mike Darch is Executive Director of OCRI Global Marketing)

By Michael Darch

Zhongguancun Science Park, known as the Z-Park, redefines the concept of a Science Park. It covers some 230 square kilometres, has over 50 universities and 200 research institutes, a population approaching 4 million, 20,000 technology companies, and 1 million technology workers. It is the most critical of China’s 54 Science Parks. In Canada, it wouldn’t be a Science Park, it would be our largest city!

Dr Xia outlined China’s endeavours to tackle climate change with clean technologies at the UN on 11 February 2008. The Z-park is taking the lead in setting up a number of innovation groups to conduct research on clean technologies. It is committed to international cooperation to address the issues and determine solutions. It will lead the commercial activity to implement solutions. The Park is increasing its investments in the field. To quote Dr Xia’s address “Zhongguancun Science Park is duty bound to contribute its share to addressing the climate change challenges both at home and globally. It is endeavouring to explore a new model of development using clean technologies and promote progress in China’s efforts to conserve energy and reduce greenhouse gas emission.”

Dr Xia and Michael Darch sign the Cooperation Agreement between OCRI and the Z-Park.

The Ottawa and Z-Park teams at the signing ceremony.

The Z-park puts words into action. In Dr Xia’s talk at the seminar, we learned that the Park had over 2000 companies in clean technology generating some 6B RMB in revenue. Dr Xia also discussed the six principles being used by the Park to guide its development. There are the usual principles: infrastructure, incubators and talent. But most intriguing is the commitment to Intellectual Property protection. Yet another myth bites the dust.

Next came the highlight of our trip, the signing of a Cooperation Agreement between OCRI and the Zhongguancun Science Park. The primary objective of the agreement between our two organizations: “enter into friendly cooperation in order to promote economic communication and cooperation between Beijing and Ottawa.” The agreement culminates nearly two years of relationship building, including a visit to the Park by Ottawa City Councillor Marianne Wilkinson. It will raise Ottawa’s partnership with both the Z-Park and Beijing to a new level and allow further development of our growing win-win economic relationship.

As I hinted in my previous blog, this was our biggest crowd yet, 102 representatives from universities, research institutes and companies. The Z-Park had done their homework and got the right people in the room. Interest was high throughout the day. During the one-on-one meetings, our universities and companies were busy right until closing at 5 PM. And, it was a Friday afternoon.

OCRI’s strategy to develop relationships and work with local partners in all markets has paid off at all three stops.

Our universities led the way again, each signing multiple letters of intent. Today, it was not only with universities but also with research institutes and companies. All our companies were kept busy throughout the afternoon and all were confident of positive results. There is little doubt that our Clean Energy Cluster’s decision to make China a high priority target was accurate.

By Friday evening our team was tired after a long week of both travel and meetings. All were looking forward to Saturday as a day off, with some returning home, some looking to explore Beijing, some making plans with friends and some just looking to relax. Work hard, play hard!

On to Hong Kong.    

(Mike Darch is Executive Director of OCRI Global Marketing) 

By Michael Darch

I said in an earlier blog that Shenzhen was an eye opener for any of our team that had not been to China. Well, Beijing blew their socks off!

The new airport, the airport access roads, the clean streets, the Olympic stadium, the subway system, the ring roads, the architecture, the number of new buildings, the vibrancy, I could go on and on. The old myths are not only dead, they are buried.

Whether you say it is the culmination of thirty years of effort, as Dr. Xia Yinqui conveyed to me, or just China showing off for the Olympics, the result is a world-class city on speed. I can even notice the difference from my last visit in October. Beijing is a showcase for the New China.

It is not without its challenges. The streets are packed. Our trip from the Canadian Embassy to the ZhongGuanCun Science Park, better known as Z-Park takes us over an hour and a half. Cars, buses, taxis and trucks are everywhere.

Speaking of cars and the Olympics, since our last visit a few months ago, all the old cars are gone. The city is obviously serious about reducing its smog before the Games. Again, you can be cynical and say that removing the high emission older vehicles is merely an attempt to look good for the Olympics, but the reality is that it is happening.

Our dinner hosted by the Z-park was excellent. The Deputy-Director of the park Dr. Xia Yinqui keeps us entertained with stories about Ottawa. Yes, I said Ottawa. Dr. Xia spent over seven years in Ottawa getting his Master and Ph.D. degrees at the University of Ottawa. He still keeps in touch with his thesis advisor and several other Canadian friends.

We are treated to Peking Duck in the traditional style, as our hosts show us how it is prepared and eaten in the proper way. We are shown how to eat the skin with sugar so that it melts in your mouth. Ioan Nistor is asked when he tries it, if it melted in his mouth. His reply, “I think it melted before it got to my mouth.”

Another interesting point comes up at dinner. There are nine Canadians there. Someone makes the casual remark that it looks like I am the only one born in Canada. I look around the table and sure enough. I am the only Canadian born in Canada. As part of my marketing pitch, I always say that immigration is critical to Ottawa and that for the last ten years Ottawa has been a destination of choice for skilled immigrants. Case proved!

Tomorrow, our largest crowd yet.

(Mike Darch is Executive Director of OCRI Global Marketing) 

By Michael Darch

Another successful day for our clean energy mission and for the Canadian Consulate in Chongqing.

The day starts on a rather humorous note. Ioan Nistor of the University of Ottawa is talking to another guest in the gym and casually asks “What do you do?” The reply, “I’m the Mayor of Toronto, David Miller.” We may know by sight all our beloved Ottawa Senators hockey players and those of our arch rival the Toronto Maple Leafs, but Toronto politicians?

Our hosts in Chongqing, the Chongqing Science and Technology Commission have done not only a terrific job on logistics for our seminar but the seminar room is overflowing - a certain and early indication of the city’s commitment to improving the environment. The Director General of the Commission Mr. Zhou Xu opens the Seminar.

Mr Zhou Xu Director General of the Chongqing Science and Technology Commission opens the Seminar.

Once again, we are impressed by the growth and modernization of the city. Although home to 32 million people, we are immediately amazed by the relative ease of getting around in the city and its mass transit system. Traffic congestion is not much worse than Ottawa’s. As Mr. Zhou lays out the science and technology policies for the city and the resources that back those policies, we cannot help but be envious. It is evident that China’s success is built not just on cheap labour but on a vision of commitment to science and technology and its application to the challenges of its industries and environment.

A little surprisingly, direct reference is made during the day to the need to improve the quality of the goods being manufactured through the application of technology. Even more surprising is the statement that growth has come at a cost to the environment and clean energy, clean technology and green policies are critical for Chongqing’s future.

Today, it is the University of Ottawa’s turn to scramble. The University signs two agreements. Not to be outdone, Jonathon Wells of Carleton lets me know that they have four leads to follow up. One of the companies is confident there will be a deal by summer.

The Carleton an University of Ottawa teams beaming with their success.

In the evening, we attend the banquet that the city is holding to celebrate the Chongqing High Tech Fair. Shawn Steil of the consulate is beaming! The Canadian contingent is by far the largest of the foreign delegations but many of the Canadians couldn’t get in as we were limited to 80 tickets.

Below is yours truly huddled with Toronto Mayor David Miller. No, we aren’t talking hockey, we are talking China strategies and our mutual interests in Chongqing. Most of the economic focus has been on China’s Tier 1 cities like Shanghai and Beijing. But the other large cities like Chongqing and the Tier 2 cities like Wuhan are being virtually ignored. And yet all these cities have populations larger than any Canadian city. This isn’t a question of taking a small piece out of a big pie. It is a question of taking a big piece out of a slightly smaller pie. Yet another topic for a separate blog stream!

Toronto Mayor David Miller and Mike Darch discussing China strategy at the Chongqing High Tech Fair Banquet.

Tomorrow, off to Beijing and what I know will be more surprises for the team.

(Mike Darch is Executive Director of OCRI Global Marketing)  

By Michael Darch

The answer to all three is Chongqing, China.

Be truthful. How many of you got that one right? With a land area of over 70,000 square kilometres and a population of 32 million, it doesn’t even have a close competitor. Chongqing’s population rivals Canada’s. China has committed the resources to make Chongqing the country’s fourth city for development and its gateway to Western China.

This designation has got the cranes out, and they are out in force. One member of our team remarked that obviously there’s an elevator shortage and the cranes are filling in until the elevators arrive. It is hard to conceive how demand can possibly match the pace of construction.

From left: Keith Parsonage of Industry Canada meeting with Vice Mayor Zhou Mubing prior to the Canada-China S&T Innovation Forum

Chongqing has long been one of China’s major manufacturing centres, leading the country in building bicycles and motorcycles. It’s third in passenger cars. It has a large chemicals industry and has one of China’s largest reserves of natural gas. It is building itself into a major logistics centre and seeing strong growth in information and communications technology, and cleantech. China has also designated the city as its centre for urban/rural issues.

This year marks the tenth anniversary of the Canadian Consulate in Chongqing. This week is the celebration and there are seven delegations in town representing over 110 people. The largest presence ever of Canadians in the city.

The theme for the week is Canada-China science and technology cooperation. Although historically a city of heavy industry, the government is committed to technology to sustain its economy and fuel its growth. Today’s Canada-China S&T and Innovation Forum has drawn speakers from across Canada, including Industry Canada, Wilfred Laurier University, International Science and Technology Partnerships Canada, the Quebec government, RIM, the University of Alberta, Chongqing University, Foreign Affairs Canada and yours truly.

The session is very well attended and the speakers are enthusiastic. The forum is opened by Vice Mayor Zhou Mubing, indicating both the importance of S&T to Chongqing and the commitment to Canada-China cooperation. The topic is obviously timely and by shear weight of numbers, cooperation cannot help but grow. You get the feeling of almost boundless opportunity. The feature event tomorrow: Ottawa’s Clean Energy Seminar.

(Mike Darch is Executive Director of OCRI Global Marketing)