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Richmond businesses head to Shanghai import expo amid ongoing China-Canada chill

Local businesses hope to penetrate the Chinese market despite political tensions and lower growth rates
(From left) Brian Mclernon, Hong Yan and David Tan are among the business owners and representatives that will attend the sixth China International Import Expo in Shanghai in November. Daisy Xiong photo

Around 30 B.C. businesses, including many from Richmond, are heading to Shanghai in November for the sixth China International Import Expo (CIIE).

The expo is an annual event, hosted by the Chinese government, where the businesses hope to raise their profiles and secure new deals in the market while China-Canada relations remain cool.

Representatives of the companies attending the CIIE this year - including Richmond-based companies Herbaland, Xypec Chemical and Sunnylife Health - gathered at Lipont Place on No. 3 Road in Richmond on Friday.

David Tan, CEO of Sunnylife Health, said he hopes to secure new deals and build connections in China and with exhibitors from other countries at the CIIE to increase his company’s competitiveness in a “very desirable market.”

“Frankly, the cost of doing business in China is very high – no one would buy your products if you don’t do promotions and you need to invest a lot to have a big effect,” said Tan. 

He revealed that his company has seen a slight decline in sales to China over the past few years.

“This has added costs to small and medium businesses. It’s a very competitive market and businesses in countries such as Australia and New Zealand are doing the same to fight for this market.”

Hong Yang, owner of CAC Naturals, which has attended the CIIE for the past six years, said going to the event is a great way to grow reputation and trust from Chinese consumers, because the Chinese government is behind it.

“For Canadian nutrient companies like ours, getting credibility among Chinese consumers is key,” said Yang.

Penetrating the Chinese market during uncertain times

Canada and China’s relationship hit a low in 2018, following the arrest of Meng Wanzhou and the two Michaels. Last week, Prime minister Justin Trudeau said at the G20 in Delhi, India there’s no room for “rapprochement” with China and a normal relationship between the countries is impossible for now.

The Indo-Pacific Strategy released by the federal government also looked to diversify trade to the Indo-Pacific market from China, whose economy took a hit during the pandemic.

However, businesses say the Chinese market is too large to ignore and they are looking to penetrate it while exploring new markets such as Southeast Asia.

“The biggest market for [our] company is in China. This is the foundation,” said Brian Mclernon, trade representative for Air Nutri, a company that specializes in charged particle waves.

“China has 1.4 billion people so the middle class would be at least 100 million people probably – that’s like two and a half Canadas for a market, so we’re not going to ignore it by any means.”

China’s economy was impacted by the pandemic when the normal growth of six per cent dropped to 2.2 in 2020, before it bounced back to 8.4 the next year from a relatively low base, and dropped to three per cent in 2022. The World Bank projected China’s GDP growth to rise to 5.6 per cent in 2023.

Tan said he is not too concerned about a potential slowdown in China because, for small and medium businesses like his, even just a small share of the Chinese market is more than enough to keep the company alive.

“The Chinese market is an established market and there is no way we are going to give it up. We just need to penetrate it, for example, explore new markets like second-tier cities instead of focusing only on Beijing and Shanghai,” said Tan.

“Meanwhile, we can spare 20 per cent of our energy to explore the Southeast Asian market. Our company has opened a branch in Hong Kong targeting that market.”

For Yang, the consumer market in China is still there, despite political tensions and his company’s export to China, mostly through e-commerce, has increased steadily every year.

“The government has its political purpose but non-government interactions are still going on,” he said, adding that there is a growing demand for health products in China after the pandemic.

“The Chinese market hasn’t fully saturated yet and we aim to take up a larger share…under any [political] circumstances, there is always a path and solution.”

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