The Prime Minister may have a hard time getting an audience with Chinese officials, but not so the Premier of British Columbia. Gordon Campbell has been touring China and other parts of Asia for the last couple of weeks, selling the merits of British Columbia as a place for Asia to do business. He’s been rather emphatic about the potential of the two ports of Vancouver and Prince Rupert as he goes from town to town selling the province as THE must go to kind of place.
Campbell will no longer be considered the Willy Loman of traveling premiers, that after reports of the reception he has received get back to the home office.
The Daily News took advantage of Canwest News Miro Cerentig’s seat on the plane and reprinted a Vancouver Sun piece from the weekend, making it the headline story in the Tuesday paper. Cernetig who has been tagging along for a number of weeks now has been posting regularly to the Sun and Canwest on the future impact of containers for Asia and North American trade. You can also follow his time on the Campbell-a-looza tour 2006 with a number of entries on his Asia-Canada relations blog.
Tuesday’s page one Headline story focuses on the vision that the Premier has for British Columbia and its place in the world of international trade.
Campbell selling Pacific dream on his tour of Asia
Premier in China to share his vision of massive ports on B. C.’s West Coast
By Miron Cernetig
Can West News Service
The Daily News
Tuesday, November 21, 2006
Pages one and two
From Marco Polo to today's legion of BlackBerry-toting venture capitalists, people have long made their pilgrimages to China with dreams of striking it rich. Today Gordon Campbell is in Shanghai with one of his own.
The dream of British Columbia's premier is this: Convince China that Canada's westernmost province is destined to become one of the Pacific Rim's great ports, one that this country of 1.3 billion people simply cannot afford to ignore.
"We need to be here in China, to trade," says Campbell, who will spend the next week on tours of Shanghai, Beijing, Hong Kong and around the province of Guangdong, one of China's white-hot coastal economies. "This isn't just for B.C., it's for Canada. We've got to be part of what's going on over here, this will be worth billions and billions of dollars to our future economy."
But in China, the emerging economic Colossus now courted by the world and clearly irritated with Canada's recently rekindled focus on human rights, one needs to offer more than just words to get the regime's attention.
So Campbell has invested much of his political capital -- along with $15 billion and counting of federal, provincial and private funds -- to sell a vast concept he is sure China's regime will be unable to resist: a massive development of Canada's West Coast into what is dubbed Canada's Pacific Gateway.
Few British Columbians have yet grasped the full magnitude -- or cost -- of this idea. Too often it is overly simplified: a plan for road upgrades here, the building up of a few docks there, perhaps a few more bridges to ease congestion in and of Greater Vancouver, the settlement of aboriginal land claims to help pave the way for port development, a few hundred hectares extracted out of B.C.'s agricultural land reserve for industrial land development.
But that's missing the big picture.
A few days before winging over the Pacific, B.C.'s premier was in his office, hunched over a map of the province on his coffee table. What he outlined is the equivalent of the St. Lawrence Seaway, the megaproject that transformed the national economy more than 50 years ago.
Thump. The premier's index finger landed on Prince Rupert, high on the curve of B.C.'s rugged and mostly empty west coast.
Now just a dot on the map, Prince Rupert could soon become a major port that can load and unload two, three or perhaps even four million containers, every year, he said. That would be more than double all the containers now handled annually by all Canada's West Coast ports. Prince Rupert's container capacity at the moment? Zero.
Another thump. The finger landed on Prince George.
That is destined to become an inland port, he says, where the Pacific Rim's jumbo jets can land to unload their cargo. Alaska is running out of capacity, said Campbell.
The finger landed again. Kitimat. It, too, is an underutilized deep water port that may soon well be the future terminus of pipelines from Canada's oil fields. Liquefied gas and other petroleum products could be channeled through it to the west, where supertankers will wait to take it to energy-hungry Asia.
Thump. The finger touched the middle of the Rockies, on Kicking Horse Canyon. That is where a $1-billion project is underway to build a bridge and to bore tunnels through the mountains, to speed up the east-west passage deeper into the continent.
Thump. Finally his finger landed on the urban pocket of Vancouver and the Lower Mainland. It must have more loading docks, he said, better highways, more and bigger bridges and improved rail systems so that China, and the rest of the world, will send their precious containers through Canada's western ports.
Campbell paused and looked up from the map.
"Frankly, the order of magnitude of our imagination is too small here."
He was reminded his own strategists have already set ambitious goals. In its Pacific Gateway Strategy Action Plan, released in April, the B.C. government sets out a 15-year plan to boost the number of containers handled by West Coast ports from today's roughly two million containers to about nine million by 2020. That would give Canada about a 17-per-cent share of the 52 million containers that North America's Pacific ports are expected to handle annually by 2020, about double what it is today.
That could have enormous economic spinoffs -- about $6.6 billion more annually to the Canadian economy, $4.7 billion of which would stay in B.C. and the creation of 45,000, high-paying jobs.
But not enough, said Campbell.
"I say we're aiming too low," he said. "I say we should go bigger . . . The emergence of the Asian economies in the early 2000s is the same thing as the emergence of the European economies 50 years ago."
Yet there is an echo of an old, almost forgotten and nearly discarded dream in all this.
Almost a century ago, the railroad tycoon Charles Melville Hays had a similar dream. He looked at the same deep waters of Prince Rupert as Campbell does now, noting the port is two to four days closer to southeast Asia then anything else on the West Coast. Hays dreamed he could build a railroad and create a great port city. But he went down with the Titanic, in 1912, and with it, at least until now, so did that dream.
B.C. must 'act fast'
"We've got a lot of catching up to do. And we've got to act fast."
That sobering warning comes from Gordon Chu, who is also in China, helping the premier sell the dream. He's the senior advisor to the Vancouver Airport Authority, a Chinese-Canadian businessman who counts China's booming province of Guangdong as his ancestral home.
Chu was asked by Campbell to come up with a no-holds barred assessment of B.C.'s status in China and other Asian markets. In April, Chu concluded B.C., and Canada, are in danger of missing out on what might be the biggest shift in world trade this century.
One of Chu's chief criticisms is that after an early, somewhat concerted effort, to seize a share of Asian trade in the 1980s and 1990s, B.C. governments of all stripes dropped the ball.
In the mid-1990s, BC Trade, the Crown agency that at its peak had a budget for trade promotion of about $20 million annually and 150 staff members, began to suffer deep cuts. Trade offices were slowly closed. It was Campbell, himself, who pulled the plug on some of the last remaining trade offices in Asia.
"Of course, a variety of provincial and national trade missions have occurred since the 1980s, although not always with sufficient follow-up or clear results," concluded Chu's report of the China/Hong Kong Market Advisory Group. "Indeed, B.C. has had a history of brief engagements with the China market rather than a consistent set of policies and connections."
Part of the move away from an Asian focus was due to the free trade agreement with the United States. "Since the Canada-U.S. Free Trade Agreement came into force in 1989," the report notes, "B.C. exports to the U.S. have grown by 178 per cent . . . In contrast, B.C.'s exports to the Asia Pacific fell by 7.5 per cent over the 10-year period from 1996 to 2005."
The fixation on trade with the U.S. was understandable. In the 1990s, Japan, B.C.'s biggest export market outside of North America, was sliding into decline. And the currency crisis that hit most of southeast Asia in the later 1990s both weakened it as an export market and soured investors' confidence in the region. Free trade with the U.S. seemed far more profitable.
But that era now looks like it may be coming to an end.
One of the worrying factors is that the United States is actively seeking free trade agreements with other nations, particularly those on the Pacific Rim itself. Washington has signed a free trade agreement with Australia, for example, one of Canada's major competitors in most of its export markets. And the U.S. is moving toward more deals in the region. The most recent talks were with Vietnam.
"It is important to remember that Canada's advantageous access to the U.S. market will not last forever," warns Chu's report.
China, too, is following the same trend toward bilateral trade deals. And Canada, for the most part, isn't on Beijing's radar screen.
"Beijing is in discussion on possible FTAs with India, Chile, Singapore, South Africa and the Gulf Cooperation Council, and there is speculation on potential direct or indirect arrangements with Japan and South Korea," noted Chu's report. "Interestingly, Canada does not appear on this list."
It's not good news. But one way of getting there is for Canada to build up a world-class system of West Coast ports and the railways and highways that connect seamlessly into the North American economy and what shippers call "the global supply chain."
Yet even here, all is not well for Canada and British Columbia.
The so-called Pacific Gateway has begun to show the strain of handling China's booming container traffic. In 2004, a government report noted, "the North American marine and land transport system was near collapse during peak season. Issues of congestion were compounded by a tug boat strike that paralyzed container terminals in the Lower Mainland. The response was immediate -- container carriers began to divert vessels to ports in the U.S. Pacific Northwest."
Last year wasn't much better. The flow of containers from China again soared, up more than 12 per cent over the previous year. "The railroad network capacity was the first part of the chain to break down during this period," Chu's report notes. "These events have eroded the confidence that B.C. businesses have spent years building with overseas customers. They have also come at a time when U.S. rival ports are rapidly increasing capacity. Major importers, such as Wal-Mart, have publicly stated that Vancouver is unreliable, and have begun rerouting their cargo to other points-of-entry."
If anyone thinks that's an exaggeration, they only had to be in the ballroom of a Tokyo hotel a few days ago. B.C.'s premier was standing in front of a giant map of his Gateway dream and was enthusiastically pitching it to a group of Japanese businessman.
Then Shuji Horimito, an importer-exporter who runs Wing International Trading Inc., stood up and asked the question that haunts those who back the Pacific Gateway.
"Premier, can you do anything about this strikeage?" asked Horimito, getting a smile for the new word he used for labour disputes.
Six years ago, 100 per cent of his exports to Asia, valued in the tens of millions of dollars, were from Canada, mostly from B.C., he explained. Now it's about 60 per cent. While B.C. ports might be closer to Asia, he said, the advantage evaporates with any delays in the "global supply chain."
"People want on-time delivery," he said. "When they don't get it every time, they go to other markets and other ports. And then it's very tough to get them back. This is the reality of the global market."
Skyscrapers everywhere
Dusk is settling over Shanghai and B.C.'s premier is on the top floor of a towering skyscraper, on his first night in China after an absence of three years. As the purple, green and red neon lights begin to illuminate Shanghai's skyline, he marvels that the skyscrapers quite literally stretch to the horizon in every direction.
A little more than a decade ago, most of this land below, known as Pudong, was rice paddies. Now, it is one of the world's fastest growing business centres near one of the planet's biggest ports. It's a good perch to get a sense that China is taking the world economy, and its traditional economic players, to an unprecedented future.
"I don't think you can understand this if you're not here," says Campbell, peering out the window. "The growth is just phenomenal."
But Campbell's awe also comes laced with a sense of urgency. While promoting the Pacific Gateway in China as a fait accompli, he knows the dream depends on quick moves by Canada before competing nations fill the void.
There's a long list of things to do on his side of the Pacific. He needs to continue pressuring the federal government to at least match the billions of dollars B.C. is pumping into the Pacific Gateway's development. Railways will need to be upgraded and, in many cases in the Lower Mainland, rerouted so people will accept more and longer trains, some three kilometers in length, as they trundle through bedroom communities.
More major aboriginal treaties will need to be signed, particularly with the Tsawwassen Indian band, which sits on valuable coastal land that will be needed in the expansion of the Roberts Bank superport. That deal is expected to be initialed and put to a vote by B.C., Ottawa and the Tsawwassen soon after the premier flies back to Vancouver.
And finally, there will be environmental concerns, as the government prepares to take out hundreds of hectares of valuable agricultural land. It will be transformed into port facilities, not unlike (though on a smaller scale) what happened to the rice paddies that once existed 46 floors below the premier.
But it's all progress, believes Campbell, and B.C.'s destiny. As he looks out at the window at China's economic miracle, he has some some advice for British Columbians in what he calls the Pacific Century.
"The world is changing," he says. "You can't do much to change that. You have to be part of it."
mcernetig@pngcanwest.com
© The Vancouver Sun 2006
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