Chinese Have Lots Of Money To Invest In Wood's Industry - If They Want To
By Ben Meisner
If there is a case to be made to have the Worthington Pulp Mill in Mackenzie and West Fraser’s Eurocan Pulp and Paper in Kitimat made viable; it sits in the hands of the right person to make that decision.
You may all remember David Emerson, Head of Canfor, then appointed to the Liberal cabinet without benefit of an election. He is a bright bird; he knows when a mill could make some money. He also knows the importance of a wood license.
Emerson is now the point man in Canada for The China Investment Corporation. That company is responsible for managing part of the Peoples Republic of China’s foreign exchange reserves, with about $200 billion dollars in the pot in 2007 when it was established. At the end of 2008 CIC’s assets had grown to $298 billion dollars, sufficient one might say to pick up the assets of both of these pulp mills if Emerson can make a case for the Chinese.
There is a price to be paid for buying all of that Chinese merchandize that Canadians and Americans alike have come to like, that price is a huge surplus sitting in China.
The Americans cannot any longer, burden with debt, be a major player in the world stage of economics and so the recent move by the large lumber companies and the province to ramp up trade with China to offset those sales was a good move. We may have just opened the door a crack at this point, but if we ever succeed in getting the Chinese to think lumber, we simply cannot supply enough and it would be rather pleasant to sit down at the next round of soft wood lumber talks and tell the Americans that we cannot supply their market with soft wood lumber to the extent that we have in the past and the soft lumber agreement can be torn up.
That in itself would change the whole picture of how lumber is sold across the world and Canada is a major player.
If Pat Bell and the rest of the crew continue to make inroads, and David Emerson, the point man for the Chinese in Canada is able to get the ear of the Chinese in lumber matters, the next ten years in the industry could be very different than what we are experiencing today.
I'm Meisner and that's One Man's Opinion.
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Oh yeah, good article too!