India, China vast untapped markets for Manitoba biz

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Hina Shah, right, greets trade adviser Ruchi Agarwal of Gujarat with a traditional Indian welcome. (WAYNE.GLOWACKI@FREEPRESS.MB.CA )

THE same day Manitoba Premier Greg Selinger announced he will lead a large trade mission to China later this month, two different trade missions from India were on the ground in Winnipeg.

Manitoba businesses have been exploring trade with those two Asian powerhouses for many years, with modest success. Lt.-Gov. Philip Lee will bring his extensive Chinese contacts on this mission along with about 40 business people.

Two-way trade between Manitoba and China is worth about $2 billion.

Direct investment from Canada to India is only about $600 million.

But trade regulations in those two countries have been liberalized over the past 20 years and the prolonged economic slump in the United States is creating a renewed emphasis in Canada to seek other markets to hedge against our current 80 per cent reliance on the U.S. for our foreign trade.

For instance, Selinger said the recent decision by the government of China to bestow approved destination status on Canada for Chinese tourists is a significant new opportunity for the provincial tourism industry.

"We will be the first province to visit China since that decision was made," Selinger said on Wednesday.

There are 100 million Chinese tourists every year and Selinger said if even a tiny percentage of them come to see the beluga whales, polar bears or Lake Winnipeg, it could be a boost to the provincial industry.

Along with a more accessible trade environment, the economies in China and India have grown tremendously -- at an annual clip of close to 10 per cent for several years.

The dramatic growth of the middle class means all sorts of different kinds of consumer demands, which means many new trade opportunities that did not exist even 10 years ago.

But the rapid economic growth and wealth generation in those countries does not necessarily create perfectly linear development.

So, whereas there are many more people with the economic wherewithal to have far more expensive tastes, basic infrastructure investment has barely kept pace. As one local trade expert pointed out, one of the reasons India's information and communications technology sector has outpaced those in many other countries is because it did not require bricks and mortar infrastructure spending.

But at the same time, grain handling and storage infrastructure has lagged badly (as it has in many of the eastern European countries).

India's minister responsible for food processing was in Canada this week. Although he was not in Winnipeg, senior staff from his department were here and in Portage la Prairie at the province's Food Development Centre where there has been an ongoing dialogue with India for many years. The other group of Indian business people in the city this week was here as sellers, rather than buyers.

A delegation of close to 10 business people from the western coastal state of Gujarat were ostensibly promoting a massive biennial business summit called Vibrant Gujarat to be held in the state capital of Gandhinagar in January.

For the first time, Canada will be a partner in the event that attracts about 20,000 delegates.

There is a large industrial infrastructure in the state that is built for trade with huge chemical, pharmaceutical and petroleum sectors.

The state of 55 million is the source of about 22 per cent of India's exports and last year Manitoba and Canada opened trade offices in its largest city, Ahmedabad.

The provincial trade representative could bring as many as 50 businesses from the state to the big Centrallia conference in Winnipeg on Oct. 20 to 22.

As much as there are technology-transfer opportunities that will continue to exist for Manitoba companies in China and India, the idea that there are plenty of eager buyers for old western technologies in those countries is outdated.

In fact, the opposite is just as likely to occur.

Kim Sigurdson, CEO of a burgeoning new company based in Winnipeg called Aboriginal Cogeneration Corp., is a case in point.

He and his partners developed a system to dispose of creosote-soaked railway ties and create clean-burning fuel in the process, with the help of a research and development centre at the University of North Dakota.

In the process of commissioning the mini-power generators, Sigurdson heard about an Indian manufacturer of very similar technology.

And as it turns out it is significantly less expensive.

He flew over there, made the right connection and will now import the Indian technology for his green energy enterprise in North America.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 9, 2010 B5