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Canadians Need to Think Outside the Box When it Comes to Trade with China

By 250 News

Wednesday, January 12, 2011 01:51 PM

Prince George, B.C. – When it comes to trade with China, Dr. David Fung, Chair and CEO of the ACDEG Group of Companies says the key is not just to sell natural resources.
 
Dr. Fung says Canada has all the natural resources, and is the most educated country in the world, however, Korea, which has virtually no resources has surpassed Canada  when it comes to GDP. “That tells me that with all our resources, we ( Canada) are not leveraging those resources.”
 
Dr. Fung told the Natural Resources forum underway in Prince George that as more Chinese move into cities, they are  creating an urban population base that is equal to “creating a new Canada” every year. Dr. Fung says as those people build new housing, “We don’t need them to build them all with wood, we just need them to use some wood.”
 
He says Canadians have to start thinking differently, that instead of just shipping a natural resource, we have to look at getting maximum value for that resource. “If you catch a salmon ,  process it, and ship it you get about $15 dollars a pound. If you freeze it you get about $10 dollars a pound. But if you catch the fish and ship the fish live, you get about $60 dollars a pound and it takes far more people to make sure that fish arrives alive, so there are good B.C. jobs being created.”
 
He pointed to China having about $2.75 Trillion dollars in foreign exchange reserve “We need to help China spend some of that money.”

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You know .... that has been my mantra on this site ever since I first started to post on here.

I feel totally embarassed for this country and the people I see around me to have this individual tell me what has to be the most obvious thing in the world.

So, people, hit me if you will, but how much longer do we have to hear such things before we smarten up???

We have begun to develop the physical infrastructure around these parts, but we have failed to develop the mental, knowledge based infrastructure.

We will continue to be the huers of wood and drawers of water for as long as that is the only vision we have of ourselves. Well, that vision is long gone the way of the dodo bird.

Pick up the latest version of National Geographic which is simply another publication that tells the same story.

What is this community doing to move into the next phase of the realities of life on this planet? I see very little innovation, if any.
isn't this what we have been telling the governmentall this time? Irronically a country (China) which we think is taking advantage of us is teaching up a very valuable lesson in utilizing our resources to the best for our economy.
All that glitters is not gold. What happens when that $ 60 live fish with all those supposedly "extra" jobs attached to it, (which really aren't all that many when you discount those who've been displaced from the cannery and freezing plant), DOESN'T make it "live" to market?

Now you've got something that isn't even going to return you what the canned fish or the frozen one would have, and in a place where if you still get ANYTHING for it you'll be damned lucky.

It's the same problem we have with any kind of "value added" manufacturing. No one seems to stop and think about the "fall down" effect, and how it impacts on "cost" when that fall down occurs near the end of the "value added" process. Where, in all too many instances, it does. And you not only lose all or most of the cost of the raw material, but everything that's been put into it up to that point, too. Value added becomes value subtracted awfully fast. This is no to say there are NO opportunities to be exploited, for there certainly are, but don't get too starry eyed about all the big bucks you're going to be making. Lots of times they just don't materialize.
Socredible .... nothing but a nay sayer ... what happens if we keep on going the way we are? We are heading the way of the USA very quickly if we do not become more inventive.

If they want live fish, then give them live fish. If they want frozen fish give them frozen fish. If they want the fish packaged with chicken, then give them that.

There are a couple of lessons.

1. Today is not yesterday and tomorrow will not be today.

2. The market is demand driven, with some manipulation to help it along a bit. If the customer demand live fish, or food produced "organically" and willing to pay for it, then provide that.

When the good Dr. is talking about live fish, he is not telling us to provide live fish, he is telling us to figure out the opportunities with an open mind (thinking outside the box) figure out where we can compete, figure out the logistics, manage the business opportunities, partnerships, clients, etc. and implement the one we are most comfortable with.

I have seen for a long time that you are simply not up to that kind of thinking. I am sorry, but that is dead weight in today's world.

It is interesting that we have a right leaning government in Ottawa as well as in this province for the last 10 years, and we are going to be taking as long to get a wood innovation centre built as it is taking to dither along with the RCMP station.

Chit or get off the pot is the expression which comes to mind.
Here is the trade imbalance. There are three container ships crossing between China and the US, two more on order. Four days travel to make the crossing. Each one can carry 15,000 containers. Speed 31 knots, much faster than regular ships. These ships come into the US full, return empty. At sea only crewed by 13. The ship can be unloaded in 2 hours. Cost, 145 million apiece.

The best part, they operate for Wal-Mart.
Think about what you buy!!!

FOR EXAMPLE THE "OUR FAMILY" BRAND OF THE MANDARIN ORANGES SAYS RIGHT ON THE CAN FROM CHINA. SO FOR A FEW MORE CENTS I BOUGHT THE LIBERTY GOLD BRAND OR THE DOLE IS FROM CAL.

ALSO WATCH FOR PICKLES. A LOT OF THE NO-NAME PICKLES COME FROM INDIA. BICK'S ARE FROM CANADA. WORTH THE SMALL DIFFERENCE IN PRICE.

Another example was in canned mushrooms. No-Name brand came from Indonesia.
Next to them were President Choice brand. Produce of Canada!! The P. C. went into my grocery bag.

Also check those little fruit cups we give our children. They use to be made here in Canada in the Niagara region until about 2 years ago....They are now packaged in China!!!!

While the Chinese, export inferior and even toxic products and dangerous toys and goods to be sold in North American markets, the media wrings its hands and criticizes the Obama Administration (and the Harper Government!) for perceived errors.

Yet 70% of North Americans believe that the trading privileges afforded to the Chinese should be suspended.

Well, duh..why do you need the government to suspend trading privileges?

SIMPLY DO IT YOURSELF CANADA !!

Simply look on the bottom of every product you buy, and if it says 'Made in China' or 'PRC' (and that now includes Hong Kong), simply choose another product, or none at all.


You will be amazed at how dependent you are on Chinese products, and you will be equally amazed at what you can do without.

Canadian Thermos bottles were made here for many years. Thermos sold out in the 1990's and now the bottles that keep our food warm or cold are now made in CHINA..We Lost---about 200 jobs!

THINK ABOUT THIS,
If 200 million North Americans refuse to buy just $20 each of Chinese goods, that's a billion dollar trade imbalance resolved in our favour...fast!!

The downside? Some Canadian/American businesses will feel a temporary pinch from having foreign stockpiles of inventory.

The solution? Let's give them fair warning and send our own messsage .

That is only one month of trading losses, but it will hit the Chinese for 1/12th of the total, or 8%, of their North American exports. Then they will at least have to ask themselves if the benefits of their arrogance and lawlessness were worth it.

EVEN BETTER. . . START NOW !

Send this to everybody you know. Let's show them that we are intelligent Canadians, and NOBODY can take us for granted.

If we can't live without cheap Chinese goods for one month out of our lives, WE DESERVE WHAT WE GET!

Gus, at the further risk of being called a "nay sayer", we're not going to GO the way of the USA, when it comes to manufacturing we've already GONE that way.


The good doctor, when he talks about "live fish" is using a very pertinent example. The Chinese do not like canned or frozen foods if they can get fresh, and fresh to them means they want to buy it "live".

Go into any T & T (Oriental) Supermarket in the lower mainland, and you can see for yourself what I mean. The fish department is full of large display tanks with various species of seafood on the fin swimming around in them.

They don't even kill your purchase in the store, it's put into a plastic bag with water in it, and you take it home still wriggling and do it in there, right when you're ready to cook it. That's what THEY mean by "fresh".

No doubt there is a market for "live" fish from here transported and kept alive until they can hit the market there.

But look at the "cost" of doing that, and then tell me, without even considering the volume that will inevitably be lost in transit, whether that $ 60 is still going to produce a better overall return than you'd get freezing or canning the same fish here. Perhaps it will, but personally, I doubt it.

Regardless, if anyone wants to try to service a market for fish there that way, more power to them. A 'live' fish doesn't seem to me to be too much different from a recently live tree, or recently extracted crude oil, however.

They're all resources, and if anyone wants to "think outside the box", they'd be thinking of how WE can utilize those resources HERE to further improve OUR OWN standard of living.

Which, so far as I can see, means making them more affordable to OUR OWN citizens, something that certainly doesn't happen when we make them scarce by exporting them all.

Organize a scavenger hunt one day. Make it a task to go to Walmart or Crappy Tire and buy four things that aren't made in China.Good luck.
"Gus, at the further risk of being called a "nay sayer", we're not going to GO the way of the USA, when it comes to manufacturing we've already GONE that way."

Sorry to disagree with you Socredible. We never reached the level of manufacturing on a per capita basis that the USA ever did. On top of that, the major manufacturing, the auto sector as well as the forestry sector, were only lifted to the level they had reached by virtue of the market next door to us. Look at any industrial country and there will be few if any who are/were as reliant on one market as Canada is/was.

The live fish scenario, as I said, is not about live fish. That is like looking at the scenario with blinders on.

The headline is the notion of "thinking outside the box". Looking not only at the well known because the well known will typically change over time. In order to do that one has to understand other cultures, NOT try to change them by teaching them our ways, but working with them on providing what their culture appreciates.

Do you see the products at WalMart that are sold to us have an "Asian" look to them? They are replicated to North American and European styles, design, etc. Walk into some stores in Richmond that cater to the Asian cultures and you can see the difference right away. Just as you used to be able to tell the difference between furniture stores catering to European tastes and quality requirements and the standard North American furniture stores. Hell of a difference!

I grew up in Ottawa in the 50s and 60s. LaPointe was the best fishmonger in the ByWard market. They had live fish in tanks (not the glass ones seen in asian markets these days, but simply like a large stainless steel sink) and you would be able to buy a fish live. Most of them were killed and prepared in front of you. Some may have taken them home.

Talk to someone who is Jewish who wants to make sure the fish is prepared the Kosher way, and they will take the fish home live. The Architect, Frank Gehry, talks about his youth in his book when his mom would take the fish home and put it in the bathtub and he would play with it. Two to three feet long apparently.

Kensington Market (primarily still Jewish when I lived in Toronto) was set up the same way, As was St Lawrence Market.

If you have ever been to Marseilles, they have a fish market right in their central harbour, Quai des Belges, where you can buy any kind of live seafood that comes in from the day's catch.

We can buy lobsters, crabs, clams, mussels and Oysters live in our chain store groceries even here in PG. Some of this stuff even gets flown in from PEI, even though the blue mussels from Washington State are far superior to PEI mussels.

We have moved from that to frozen fish, prepared to go into the frying pan. We came from were others in the world still are. That does not make us better, or them worse. Like any food, fresh is typically best unless we are talking about such things as brie and other kinds of cheeses that improve with age. We are just not willing to take fresh because we have to deal with preparation, and we are also not willing to pay for fresh. The term "fresh" is even a misnomer. In fact, it is dead fish, and we really do not know how long it was dead, whether it was frozen and then thawed, etc.

You go to restaurants along the Belgian coast, and virtually every one has live seafood from the day's catch. Try that in North America. When Europeans travel along either coast and do that for the first time, they are totally surprised that there are no such places or very few such places here.

Different cultures. That is all it is.

Open our eyes. Travel. Look for opportunities to provide what people are already used to doing and consuming. Don't try to change them to our ways. And look for places that are moving to higher levels of affluence and are able to participate more often in products or services that were rarely affordable in the past.
Thinking outside the box, eh? Are those Canadian manufactured sides of that box being sent to China for assembly by them and then sold back to us because we are too overpaid to assemble that box ourselves? That's the way I see it.
All that is undeniable, Gus, but we are looking at the situation from two different levels, I think.

A 'trade' with China where the Chinese have already piled up $ 2.75 Trillion in North American currency is certainly NOT 'trade' in any reasonable definition of the word.

International 'trade' really only has one sensible purpose ~ it allows for the diversification of consumption amongst the citizens of the countries trading, as each exchanges its 'relative surpluses' for the alternate 'relative surpluses' of the other.

It is, or should be, the equivalent of 'barter' ~ your stuff for my stuff, assuming each party to the transaction would prefer the alternative stuff to their own.

This is certainly NOT what we in North America currently have in our trading arrangements with China.

We can certainly serve their "boutique markets", which are indeed growing with increasing affluence there.

But if anyone thinks this is going to redress the current trade imbalance meaningfully, or that this is going to be the great cure-all for more 'jobs' here, they're dreaming in technicolour.

And it's a dream that'll soon turn into the nightmare of reality, when the dreamer finally awakens, and all that had value in his own country is now owned and under the control of foreigners.

This is the same kind of 'thinking' that has got us into the mess we're now in 'financially', and has led to the demise of many industries here that produced many "good" products ~ ones that were well made, and functional, and lasted ~ and that's without even comparing them to the cheap crap from China and elsewhere that's replaced so many of them. Imports that've now turned modern retailing success into finding the shortest distance for wares offered between store shelf and land-fill, and make us suckers come back for more. Rather than taking pride in offering products that would actually serve customers needs the best.

International 'trade' as it's now carried on is NOT primarily an exchange of goods, but rather a perverted quest for international 'credit' ~ some other country's 'money', which in reality is only "effective demand" for THAT country's goods and services. But ever increasingly CAN NOT be used for that purpose.

Rather it IS increasingly used as an excuse for the central Bank of the country holding the 'credit' to 'print money' ~ its OWN 'money' ~ in sufficient quantity to try to close the ongoing gap which would otherwise exist between the collective 'prices' of goods and services for sale in its domestic market, and the collective 'incomes' of its citizens available to meet those 'prices'.

THIS phenomenon, which is prevalent in EVERY country throughout the modern, industrialised world, and quickly spills over into 'developing' countries as they increasingly industrialise, leads to a frenzied race to secure international markets. One which no country can currently ever really "win", and one where the losers will eventually have to try to 'capture' what they could never attain commercially through 'other means'. Experience in the last 150 years indicates those 'other means' have always been war.

But Heaven forbid we should ever look for the 'causes', let alone the 'corrections' necessary. Such is the power mere figures with a $ sign ahead of them have over things. So we'll remain deluded, and what will be, will be.
You want to change the system of international monetary control we have over private and public entities trading with each other, of ahead Socredible.

The fact is, trade is global, jsut as trade within Canada is "global". We do not deal with interprovincial or inter county/RD or inter municipal trade. You wanty to talk about why Vancouver is richer per person than Burns Lake? Hopefully not.

We might be in a trade deficit between us and China, but we are in a trade profit with the other countries, because in total, we have had a balance of trade in our favour for most of the last 2 decades.

Here is the situation in 2009 in 15 countries, with 10 of the countries which have the highest export trade in he world included.

Show is country, export in $billions, imports in $billions, variance in $billions and percentage variance (balance of trade)

The sorting is by highest balance of trade. Canada is 7th. Why? Because we trade oil. USA is at the bottom of the list.

russia $304 $192 $112 36.8%
china $1,204 $954 $250 20.7%
germany $1,145 $957 $188 16.4%
brazil $153 $128 $25 16.3%
South Korea $374 $318 $56 15.0%
Netherlands $421 $372 $49 11.6%
canada $459 $416 $43 9.4%
sweden $133 $121 $12 9.0%
japan $545 $502 $44 8.0%
switzerland $208 $193 $15 7.2%
Italy $427 $404 $23 5.4%
France $474 $536 -$62 -13.1%
spain $224 $287 -$63 -28.1%
uk $356 $484 -$128 -35.9%
usa $1,069 $1,575 -$506 -47.3%

Look at the countries that have little if any oil or gas, yet have a balance of trade in their favour. Learn from them how they do it.

As far as the USA goes, I think they have a long road ahead of them. We have to make sure we do not get trampled on as they try to climb closer to where they were at one time.

The real question is world security. What part if any will China play with that and will we trust them. We have grown up so long with not trusting them.
Again, Gus, try to separate the physical reality from those figures with the $ sign in front of them. Those $ figures are NOT an accurate 'reflection' of either physical or financial reality.

Not only because they are NOT a COMPLETE representation of what is happening between and amongst the countries of the world in regard to other very pertinent factors, like foreign 'investment', shipping costs, etc., that aren't included; but because the $ as a symbol has taken on a life of its own separate from being a 'reflection' of anything.

If you are continually shipping out more in actual real wealth (commodities that are, or may be at some time in the future, actually USEFUL to you), than you are receiving back in alternate real wealth, your country is becoming physically poorer, not richer. That is a simple statement of obvious physical fact. Yet this very situation is called running a "favourable" trade balance!

International trade that is actually 'TRADE' can be of great benefit to the countries participating in it, in that it allows their citizens to enjoy greater access to goods they can not readily produce or grow themselves in exchange for those things they readily can, and are already available to them, 'physically' at least, in surplus. It is, or should be, properly equated to "barter".

Why is it physically necessary to go beyond that? What is it that we really hope to gain? Some other country's "money"? What, other than ultimately being "effective demand" for THEIR ~not OUR ~ goods and services does that do us?
Perhaps if national currencies circulated internationally, instead of being 'traded' internationally, this would become apparent to you.

If Boeing, for instance, sold a new 747 to QANTAS in Australia, and it was paid in Australian dollars instead of US dollars. And those Australian dollars could then only be spent in Australia on alternate AUSTRALIAN goods, which is the premise of an actual "trade" using currency as a medium of exchange. Instead of what more often happens, where the US dollars the Australian ones had to "BUY" are being spent on US goods in America instead.