Canada-China FTA called for by banker

China Daily (Canada) - - FRONT PAGE - By LI WENFANG in Guangzhou li­wen­fang@chi­

Canada and China should be work­ing on a free-trade agree­ment to en­hance their un­der­de­vel­oped trade re­la­tion­ship, said a top Cana­dian banker.

From “un­der­de­vel­oped re­la­tion­ship to prop­erly de­vel­oped one is go­ing to take more con­crete think­ing on both sides. We are not com­pet­i­tive. We are com­ple­men­tary,” said Kevin Lynch, vicechair­man of BMO Fi­nan­cial Group.

“What we want to do is to find more ar­eas for trade be­tween our two coun­tries. More con­crete dis­cus­sions about how we dou­ble trade in five years.”

Lynch iden­ti­fied sig­nif­i­cant po­ten­tial in bi­lat­eral trade agri­cul­tural prod­ucts, in­clud­ing clean tech­nol­ogy re­lated to wa­ter and air, and health ser­vices deal­ing with the ag­ing pop­u­la­tion.

Canada can be an im­por­tant part of the Chi­nese strat­egy of di­ver­si­fy­ing its en­ergy sup­ply, he said.

In its new Five-Year Plan (2016-20), China aims to push for­ward the es­tab­lish­ment of free-trade agree­ments with Is­rael, Canada, the Eurasian Eco­nomic Union and the Euro­pean Union, as well as an Asia-Pa­cific free-trade area.

In his bank­ing pro­fes­sion, Lynch said he looks for­ward to an ex­panded role of the trad­ing hub of the Chi­nese cur­rency ren­minbi in Toronto, which was launched in March last year.

“We are large par­tic­i­pants in it. The more we can ex­pand it, the bet­ter for ev­ery­body. It low­ers the cost for com­pa­nies do­ing busi­ness in China and out­side China,’’ he said.

“If you are a small busi­ness per­son, the ren­minbi trad­ing hub is cru­cial to get your cost down. The trans­ac­tion cost was so high be­fore. We are a coun­try with a lot of small and medium-sized en­ter­prises. Guang­dong prov­ince is a re­gion with a lot of medium-sized com­pa­nies as well.”

Ex­panded trade be­tween Canada and China will pro­vide fur­ther op­por­tu­nity to make ren­minbi clear­ing even more ef­fec­tive and valu­able, Lynch said.

The Toronto ren­minbi hub serves as con­duit for 24-hour cov­er­age of global ren­minbi trans­ac­tions, en­abling busi­nesses to con­vert Cana­dian dol­lars di­rectly into Chi­nese cur­rency.

Lynch’s bank runs the only fully in­cor­po­rated sub­sidiary of a Cana­dian bank in China.

“We want to grow with the Chi­nese econ­omy and find in­no­va­tive ways to serve cus­tomers be­cause we are not of the size of do­mes­tic banks,” he said.

China is the sec­ond-largest trad­ing part­ner of Canada, af­ter the United States, with two-way trade reach­ing 85.8 bil­lion Cana­dian dol­lars last year, up 10 per­cent year-on-year, said Rachael Bedling­ton, con­sul general of Canada in Guangzhou. Chi­nese in­vest­ment in Canada last year is es­ti­mated at $61.8 bil­lion.

“The Chi­nese mar­ket rep­re­sents tremen­dous op­por­tu­ni­ties for Cana­dian com­pa­nies in a wide va­ri­ety of sec­tors. We also see Canada as a prime des­ti­na­tion for Chi­nese in­vest­ment,” she said. “We are con­vinced that Canada-China trade will con­tinue to steadily rise in the years to come.”

Bedling­ton’s con­sulate general is ex­pand­ing to keep pace with in­creas­ing bi­lat­eral ties, with the im­mi­gra­tion sec­tion launched last year to boost the ca­pac­ity of han­dling visa ap­pli­ca­tions.

As a new step in pro­mot­ing ties, Al­berta prov­ince launched its trade of­fice in Guangzhou, cap­i­tal of Guang­dong prov­ince, on Tues­day, the fourth such of­fice for Al­berta in China.

“The gov­ern­ment of Al­berta is very in­ter­ested in in­creas­ing our op­por­tu­ni­ties to trade with China go­ing both di­rec­tions,” said Deron Bilous, Al­berta’s min­is­ter of eco­nomic devel­op­ment.

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