Gateway to the far east: trade adviser lays groundwork for Sino-Northern Ontario business ties.

A May hiccup in platinum group metals prices amid reports that the Chinese government was attempting to slow down its super-heated economy should be positive proof of China's widening global economic influence.

"In the future, there will not be a single business in the world that will not be affected by China," declares Carl Liu, a business consulting agent with Sudbury-based 3C International Company.

[ILLUSTRATION OMITTED]

"The Chinese will be the next economic super-power," he says.

Liu is Northern Ontario's unofficial emissary to the world's fastest-growing economy.

After being laid off by a Sudbury-based mining supply company, he hung out his shingle about a year ago as a private trade adviser, hoping to educate Northern Ontario companies about taking advantage of the world's biggest consumer market, which boasts a population of 1.3 billion.

Born in the coal country of central China's Shanxi province, and a graduate of the University of Beijing's mine machinery engineering program, Liu worked for 15 years with the university and as a project leader in the manufacturing sector, negotiating funding support between state-owned companies and the government, before deciding to move his family to Sudbury in 2000.

These days he plays matchmaker as a private consultant helping export-ready companies navigate the bureaucratic maze and regulatory framework of China's state-run economy, as well as assisting them in laying the groundwork for business relationships.

"I know what they want to hear from us," says Liu, who keeps a Rolodex full of relatives and friends within Chinese businesses and government institutions.

He cites several reasons for China's emergence as Asia's leading emerging economy.

The Chinese began experimenting with private enterprise in the early 1990s, and have been eagerly pursuing new ideas and technologies.

"A lot of Chinese learn management skills and advanced technology from foreign countries," says Liu.

Following China's entry into the World Trade Organization in 2000, the government revised many policies, allowing foreign companies and investors to gain easier access to the domestic market.

With a mining sector that is six times bigger than Canada's, Liu advises companies not to expect success by exporting high-cost finished products directly into the Chinese market. Most standard mining equipment and parts are already in great abundance in China, since many American and other foreign-owned companies, like mining supplier Atlas Copco, have established manufacturing assets there to take advantage of cheap labour.

Where Canadian companies can be competitive is in state-of-the art, value-added technology.

For Sudbury, that means exporting expertise and products in advanced underground communications or automated management systems.

Currently, he is working with a Quebec company eager to expand its diamond drilling services to China. As well, there are two Sudbury companies looking to manufacture and sell their patented products in Asia. A Sudbury steel construction company is exploring opportunities to bid on projects in China, and a North Bay firm specializing in mine tailings management systems is trying to transfer its technology overseas.

Across the Pacific, there are several Chinese companies wanting to explore investment opportunities in Canada, particularly in mining properties to feed China's insatiable demand for raw materials, he says.

"Some other companies would like to import nickel, copper and iron ore from Canada."

Though his initial focus was on making contacts with the 350 or so companies in the mining supply sector in northeastern Ontario, lately he is expanding his focus to include other industries, such as forestry.

Liu is looking for innovative Canadian companies in the forest products and construction sector with specialty sawmill technology or environmentally friendly building materials to supply China's booming construction industry.

But for all of Asia's long-term investment promise, Liu still finds Northern Ontario business owners "very conservative" in listening to his spiel.

Nevertheless, he is anxious to work with development officials in individual Northern Ontario cities to eventually organize outgoing and incoming business trade missions.

"Sooner or later we'll go there, that's for sure."

www.3cinternational.ca

RELATED ARTICLE: Trade tips when doing business in China

* Take time to build a sound relationship with your Chinese partners and customers. Absolute trust must be established, since the Chinese have limited faith in the legal system.

* Establish the right management structure for your relationship in China. You can use agents, joint ventures, turnkey operations or own your own factory. The road is littered with companies that go it alone and fail.

* Look for a Chinese partner with strong quality and process control. You can depend upon ISO certification.

* Engineering is needed on both sides. Examine the high-tech capabilities of manufacturers.

* Understand the logistics. If shipping by sea, expect a six- to eight-week allowance for product delivery. Just-in-time inventory may not work. You may need to maintain a higher level of inventory to support your customers.

* Recognize the importance of family relationships in China. Business networks are based on familial ties.

* Plan to participate in robust social activities, as business is conducted through social interactions more in China than in many places. Dinners, drinking, tours and sight-seeing are part of a continuum of daily commerce and are important relationship-builders towards establishing trust.

By IAN ROSS

Northern Ontario Business