Is China a genuine market for Canadian goods?

This is a guest column; ‘Mihael Willman’ is the pseudonym for a concerned Canadian – JG.

By Mihael Willman

China – A Potential Market of 1.3 Billion?

One of the repeated arguments of the Harper government, and the business sector, to make increased Chinese investment in Canada palatable to Canadians, is that this is necessary in order to open up Chinese markets to Canadian companies. If we close Canada to Chinese investment, they argue, Beijing will refuse to open up its ‘billion plus market’ to Canadian businesses.

Let’s stop this malarkey about a market of over a billion people, waiting with bated breath to buy Canadian goods. There is no such thing! The vast majority of Chinese citizens, including those who make goods for export to Canada, do not have the disposable income to spend on imported goods. On average, urban Chinese earned about $2,000 to $3,000 per capita in 2010, while rural Chinese earned $1,000. In other words, they earned the equivalent of what a minimum wage earner in Canada, working forty hours a week, earns in less than two months or three weeks respectively! That is why Canadian and American companies produce their goods in China, because of its extremely cheap labor force.

Only about one million Chinese have assets of $160,000, while about 1.02 million people have assets of about $1.6 million or more. Out of a population of 1.3 billion, this amounts to barely .076 and .078 per cent of the population, respectively. It is not clear whether China’s 251 billionaires, as of 2012, are included in the latter figure. Even if they are not, the percentage of wealthy Chinese remains virtually unchanged.

In other words, China’s wealthy, with the financial resources to be able to buy Canadian products, number no more than a couple of million. That is nowhere near the much touted ‘billion-plus’ market Canadian business and Stephen Harper repeat ad nauseam as justification for opening up Canada to Chinese government-owned or privately run companies.

If Canadian stores are flooded with Chinese-made goods, because they are cheaper to produce then Canadian-made, just what kind of goods do Canadian companies expect to sell to this supposed market of over one billion?

Maybe it’s time Stephen Harper provided a list of exactly which companies and which products these teaming masses of Chinese potential buyers supposedly want. And if they can’t come up with something that 75 per cent of the population wants and, more importantly, can even afford to buy, then please stop repeating the lie about the ‘over one billion strong market.’ It just does not exist! In actual fact, more than 99.8 per cent of China’s population is too poor, by Canadian standards, to be able to buy Canadian goods.

Canadian shoppers rush to the U.S. to buy cheaper priced Chinese-made products, or frequent Wal-Mart in search of cheap imports, rather than buy what few Canadian products are still available. While a proportion of these shoppers may not have the financial means to buy Canadian goods, many others prefer the cheaper imports. How then, can anyone imagine that the vast majority of Chinese citizens, with vastly smaller disposable incomes, would be interested in what Canadian businesses produce?

We have already seen a number of Canadian businesses go to China with their goods, only to have unscrupulous Chinese businessmen counterfeit the same products, to sell to individuals with more money than discretion. Just ask the Ontario Ice Wine producers!

Stephen Harper – Stop spouting the party-line about the billion-plus Chinese market just waiting for the arrival of Canadian goods. Do a little research and some simple math to see that the actual facts contradict these claims. And stop listening to the small number of individuals, no matter how wealthy and influential they may be, whose financial self-interests outweigh the political and national interests of Canadians and Canada at large.

There are many other markets in the world, with far greater numbers of potential buyers for Canadian-produced goods, than that of China. And we do not need to sell off our resources and our soul to be able to access them. China may have a population of 1.3 billion, but it does not have a market of 1.3 billion potential buyers of Canadian-produced goods. That is a farce that only the ‘Emperor with no clothes’ would be so gullible as to believe.