It is expected that China's accession to the WTO will increase the confidence of foreign companies and intensify competition. The new environment will also raise standards and profitability. State-owned enterprises are expected to be sold off (a process already underway), while others may collapse, overwhelmed by the competition.

During the PBB mission, Chinese Premier Zhu Rongji announced that the country's 520 key state-owned companies must establish R & D centres by the end of this year, and that R & D centres will be created at the city level to contribute to the expansion of smaller firms. Only by accelerating the development of new technologies and new products will state-owned enterprises be able to survive in the more open economy. To speed-up the process, Chinese companies are also being encouraged to establish linkages with universities and research institutes.

The Chinese banking system is being encouraged to develop new revenue streams such as on-line banking in order to make it more competitive. The Central Bank of China is stepping up its efforts to improve its legal framework in preparation for changes to the financial landscape after China's WTO entry. On March 16, the Industrial and Commercial Bank of China released the first business to business on-line banking service in the domestic banking sector.

In response to the Chinese government's policy to develop the country's western region, the World Bank is extending loans of up to US $7 billion over the next three years. The money will primarily be used to support infrastructure development and water conservation programs in the western provinces, as well as environmental projects in the east.

Major fields the government of China is promoting for both domestic and foreign investment include infrastructure facilities, environmental protection education, manufacturing services, tourism and entertainment industries.

The consumer market in China is expanding rapidly. Today 71% of household consumers in Shanghai shop in supermarkets (50% in Beijing) according to AL Nielson, market research institute. This growth is further evidenced by the expanding ownership of computers, cell phones and cars.

While many Canadian companies have explored the Chinese market over the last 20 years, there are few real success stories. With the changes that entry into the WTO will bring to the Chinese economy, Canadians are encouraged to take another look.

One of the keys to success in China is to work in collaboration with a Chinese partner. And, with the growing pressure to improve competitive position, Chinese organizations are actively seeking out foreign business partners that can bring to the table investment, technology and marketing expertise.

Hong Kong
Hong Kong is experiencing dynamic growth and has become the world's fourth largest source of foreign direct investment. It is becoming Asia's IT and communications centre and a source of capital for IT startups from around the world. Business has been barely affected by the change of government and Hong Kong continues to enjoy a free press and an open market.

Opportunities for Canadian firms in the IT sector abound, especially for those in Internet technologies, as well as in telecoms, Internet banking and distribution services. While the role of Hong Kong in general trading may decline once China enters the WTO, it is expected to remain as the centre for regional headquarters.

Jiangmen City
Jiangmen is located in the western Peral River Delta region, about a two-hour ride by hydrofoil from Hong Kong.

More than 3,000 foreign-funded enterprises are registered in Jiangman. Of them, 15 are among the top 500 transnational companies in the world including Mitsubishi, Sumitomo, Kodak, and ABB. Jiangmen has been aggressive in its efforts to develop an attractive investment environment and more open economy.

The PBB mission met with the Governor and Vice Mayor and over 200 business organizations seeking Canadian partners either for investment or export to Canada. The mission was presented with a product fair of local companies' products. The Alliance met with the local Vice Chair of the China Council for the Promotion of International Trade, Mr. Chen, to discuss two-way trade opportunities.

Mission participants visited major operations in textiles, telecoms, electronics and motorcycles in Jiangmen and vicinity.

Nanning
Nanning is the capital of Guangxi Region, which has undertaken the implementation of a comprehensive development plan. Taking advantage of its excellent ocean ports, the region is open to foreign investment.

Future projects include airport improvement, roads, railways and creating a sustainable environment. Strict environmental policies are being put in place and enforced with the view to rehabilitating or eliminating offending industries.

The Alliance met with the local Vice Chair of CCPIT who offered full assistance to the Alliance and its members for developing business in Nanning.

The delegation met with the Mayor, Vice Mayor and Secretary General of the Party. A business roundtable was held to which over 60 companies participated.

Business opportunities were identified in food processing, environmental equipment and technology, gas distribution, chemicals, mining, and hydroelectric power, including equipment.

Xiamen
Xiamen, located in Fujian province on the ocean directly across from Taiwan, has a modern port facility ranked among the top ten in China. With a population of 1.2 million, Xiamen exports US $68.3 million in light industrial and consumer products, and imports from Canada some $36.1 million in chemical raw materials and minerals. Companies with operations in the area include Kodak, Dell Computer, GE, Emerson Electric etc. Foreign banks are well represented led by Citibank and HKSB. Xiamen has one of China's 15 Free Trade Zones.

Business opportunities exist in a wide range of sectors, most notably: electrical equipment; metallurgy; information technology; pharmaceutical and medical equipment; food processing; tourism; environmental technology; construction.

The delegation met with over 40 companies as well as the Mayor of the City.