Magazine article Ivey Business Journal Online

The Inevitability of Doing Business with China

Magazine article Ivey Business Journal Online

The Inevitability of Doing Business with China

Article excerpt

There's a huge difference "between taking active risks and sitting passively at risk," as Paul A. Laducina of A. T. Kearney's Global Business Policy Council writes in this edition. Approaching new and unfamiliar markets is always a gamble, but it's much more dangerous to ignore these opportunities. This is especially true for large Canadian companies. Given the size of our domestic market, companies must exploit markets outside our borders to expand. And inevitably, that growth will require doing business with China.

Great swaths of markets around the world already depend on China for their economic health. The fast-growing Chinese economy is gobbling up commodities from scrap steel to oil to grain to cement. Chinese consumers are hungry for the latest state-of-the-art conveniences, from appliances to communications devices. Today, China is the world's largest recipient of foreign investment and the lowest-cost manufacturer in dozens of industries. By 2020, the International Monetary Fund predicts that China's economy will overtake the U.S. economy to become the world's largest, and therefore most influential, market.

Already, China is Canada's second-largest trading partner with two-way merchandise trade of $23.3billion in 2003. …

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