The Nation’s Business

The trillion-dollar man comes calling

Peter C. Newman November 17 1997
The Nation’s Business

The trillion-dollar man comes calling

Peter C. Newman November 17 1997

The trillion-dollar man comes calling

The Nation’s Business

Peter C. Newman

The international circus officially known as the Asia-Pacific Economic Cooperation summit, being held in Vancouver at the end of this month, is bound to be dominated by China’s head of state, Jiang Zemin.

Representing a quarter of the earth’s population and the fastest-growing economy in world history, he will be the most compelling and the most reviled of the 18 visiting heads of state.

Though Jiang was not part of the regime that crushed the human rights activists in 1989 at Tiananmen Square—who can ever forget the bravery of that kid starring down that tank?—he certainly didn’t speak out against these atrocities, and has done nothing since taking power to pardon or lighten the jail sentences of the youthful protesters.

“Before Tiananmen, these people were Ping-Pong players and panda bears—they were our kind of guys,” James Przystup, the head of an American think-tank, observed during Jiang’s recent U.S. visit. “Then, suddenly, they were Communists, so you either love ’em, or hate ’em.”

For Canada, the fact as well as the substance of Jiang’s visit will be of profound significance. For four crucial days after the Vancouver gabfest winds up on Nov. 25, he will tour the country, assessing our business leaders’ abilities and intentions of breaking into his country’s 1.2 billion consumer market, worth an eventual trillion dollars or more per year. The World Bank recently predicted that by 2010, China’s gross domestic product will equal or surpass that of the United States— and that assumes annual growth of nine per cent or more per year. China is exceeding that rate; its foreign exchange reserves are now up to $200 billion.

Laurent Beaudoin, the CEO of Bombardier, for example, will want to explore the possibilities that arise from the intention of the Chinese state airlines to purchase an astounding 2,200 commercial jets, worth $200 billion, over the next two decades. Jean Monty of BCE Inc. will want to discuss the mouthwatering prospects implicit in a recent survey that at the moment only two per cent of Chinese homes enjoy telephone service. Matt Barrett of the Bank of Montreal, which has been the most active Canadian bank inside China, recently held a directors’ meeting in Beijing.

Other CEOs of major as well as minor firms will be pushing their own deals with the Chinese delegation that will accompany the president, but the largest transaction could involve Atomic Energy of Canada Ltd., which has already sold two 700-megawatt Candu reactors worth $3 billion to the Chinese, and wants to sell more. Nuclear installations are a tricky part of any trade agenda, because the Chinese stand on the issue has been ambivalent at best. The Jiang government has been vehemently denying that it is selling

Reactors, phones, aircraft and bank services—but not Tiananmen—will be on the agenda when Jiang Zemin tours Canada

Chinese nuclear technology and fuel to help some of the world’s rogue states, such as Iran, to make nuclear weapons—and at the same time just as vehemently promising to stop doing so. During his recent White House meetings with Bill Clinton, Jiang persuaded the U.S. President that the Chinese would account for every milligram of enriched uranium it produces in the future, so that American firms are now free to compete with us for nuclear reactor projects.

While Team Canada, our previous trade initiative with the Chinese, downplayed the democracy issue, Jiang’s declaration at the White House that food and shelter, but not political dissent, are fundamental aspects of Chinese life will set off fireworks during the Chinese president’s Canadian visit. Apart from his personal convictions,

the reason Jiang so adamantly insists that he intends to liberalize the countr ƒ s economy, but not its political life, is that at the moment he feels the country must be governed as a dictatorship. That is heresy in Canada (even though the Liberals have been in power during this century longer than the Communists have ruled either China or Russia), but most sinologists agree that the economic freedom the Chinese now enjoy has created more rights and opportunities than they have enjoyed in the past 5,000 years of bloody history. “Jiang’s American visit was in my view one of the most significant events of this decade,” I was told by Jack Austin, the Canadian senator who heads the Toronto-based Canada China Business Council. “How you characterize the relationship between China and the United States will decide the history of the 21st century. If you decide that China is a bandit and has to be excluded, controlled and contained, then we will be declaring ourselves

their enemy, and the ƒ 11 behave as our enemy. We want to make sure that Canada’s commercial relationship isn’t put in the shadow by the American situation, where the Chinese want to build a relationship through trade and investment.”

Jiang will visit Calgary, Ottawa and Toronto, where the Business Council will stage a grand banquet for Canada’s 1,500 leading business executives. The event, where the president will deliver his only public address, is being deliberately organized to include the heads of small and medium businesses. Invitations are harder to get than tickets to the Super Bowl.

Others are becoming interested in the Chinese market. Premier Lucien Bouchard has been touring the Chinese subcontinent with 150 Quebec businessmen, and British Columbia’s NDP Premier Glen Clark was in Shanghai last week. When I suggested to Jack Austin that I’d heard a rumor the Chinese wanted to keep Clark, he denied it on the spot.

“No,” he said.” They don’t want him. They told me he’s too socialist for them.”