BC is uniquely positioned to take advantage of huge demographic shifts in Asia.
But the province won’t benefit from that opportunity unless it overcomes its fear of Chinese business, becomes more ambitious and works harder to make social connections.
“I think that backpacking trips to Europe are not necessarily the best use of one’s time as a young person,” said Dominic Barton, global managing director of McKinsey & Company, in an address to Business Council of BC members on May 28.
In the next 20 to 30 years, 2.7 billion people in Asia are expected to become middle class consumers, said Barton, who is originally from B.C. but has spent much of his career in Korea, Shanghai and Australia.
In China, 350 million people will move to urban areas, 170 large-scale railway systems will be built and Chinese tourists will increase their trips abroad to 120 million from 80 million.
Barton identified five areas where B.C. can shine in Asia (see sidebar):
•energy;
•agriculture;
•tourism;
•education; and
•infrastructure.
Barton challenged B.C. business to follow Australia’s example to “pivot” toward Asia.
“How much of your [company’s] footprint is in this part of the world? How much of your talent is from this part of the world, how much of your board is from this part of the world, and what are the linkages in our education system?”
While Vancouver may see itself as a fully-fledged member of the Asia-Pacific economy, it’s news to the Asian business leaders Barton meets with regularly.
The hesitation goes both ways: Asia Pacific Foundation polls show that Canadians “display a lingering hesitation and concern about Asia” and are distrustful of Chinese companies becoming major stakeholders in Canadian companies.
“I think there’s a bit of a view of Canada today: ‘Do they want us or not?’” said Barton. “This comes back to this image that we have: Are we players? Are we interested in what’s going on?”
To bridge the gap, Canadians need to make more social connections with China and other Asian countries.
While China is eager to send students to Canadian universities, Barton said Canadian students at both the university and high school level also need to be going to China to study – and in the process make connections and develop cultural understanding that might bear future fruit.
According to McKinsey & Company’s Dominic Barton, B.C. will need to bring its A-game to take advantage of these five sectors:
Energy
“If you look at the total cost [of LNG] by source, where it’s coming from, B.C. is in a very good position compared with Australia. There is a bit of a timing issue on this, because people do set contracts and build relationship over time. We have a limited window to get this done or the opportunity will be gone.”
