B.C. in sweet spot on surging Canada-Taiwan business ties
Excitement over bilateral trade, investment agreement talks tempered by China concerns
Ng Weng Hoong, June 5, 2023, Monday
Taiwan is emerging as a rare bright spot in Canada’s dismal start to the 2020s.
The decade began with the outbreak of a deadly new pandemic that soon plunged the global economy into its worst contraction since the Great Depression of 1929. In 2021, biblical-grade climate disasters struck British Columbia province, including a killer heat dome and atmospheric river floods that destroyed entire towns and a major part of the province’s highway. Canada’s ties with China continued to plummet while Russia’s devastating war on Ukraine from February 2022 shows no signs of ending. Inflation has returned, and so has its evil twin, rising interest rates, made worse by the global economy drowning in record levels of debt and deficit.
Amid that gloom, Canada’s surging trade with Taiwan, at record levels two years in succession, and the promise of increased political and economic ties have delivered an unexpected silver lining.
The Canada-Taiwan trade exceeded $12 billion in 2022, up more than 17% from the previous year’s high of $10.28 billion, according to Statistics Canada (1). Even more impressive was the rate of growth. Last year’s bilateral trade represented a doubling of the 2012 total of $6.05 billion, faster than any between Canada and its major trading partners over the past decade.
Canada’s merchandise trade, in million C$
2022 2021 2012
With world 1,535,945 1,267,987 936,312
- U.S. 1,066,081 869,578 632,627
- Europe 105,531 88,162 86,041
- China 98,737 85,804 51,320
- Taiwan 12,025 10,276 6,045
Source: StatCan
While tiny in the context of Canada’s record $1.54 trillion worth of global trade last year, Taiwan is positioned to punch well above its weight in the coming years. Three major trends underpin the optimism, with B.C. in line for a key role as both beneficiary of and contributor to the coming Taiwan wave.
The Taiwan momentum
First, the West is no longer shying away from supporting the spunky island republic of 23 million people which is coming under growing threat from neighbouring China. Xi Jinping, who has just won an unprecedented third term as China’s supreme leader, has vowed to “reclaim” Taiwan that Beijing regards as a breakaway province. When China banned the import of Taiwanese agricultural products in retaliation for last August’s visit to Taipei by then U.S. House Speaker Nancy Pelosi, Japan stepped in (2) to take up a significant portion of the island’s lost exports. Japan’s defiant act would have been unthinkable in the past when most countries were afraid of offending China over the Taiwan issue.
Ms. Pelosi’s groundbreaking visit has opened the path for other politicians from the United States (3), Europe, (4) and India (5) to travel to Taipei to openly meet with Taiwanese government leaders. Beijing’s angry protests have been largely ignored.
Second, Canada is on Taiwan’s radar as part of its strategy to reduce economic dependence on China (6). Due to their historical and cultural ties, and physical proximity, China absorbs 42% of Taiwan’s exports and accounts for 22% of the island’s imports.
“We are optimistic about long-term bilateral growth since our economies are complementary,” said Angel Liu Lihsin, director general of the Taiwan Economic and Cultural Office (TECO) in Vancouver, which has responsibility for Taiwanese affairs in western Canada.
“Our semiconductor industry needs Canadian minerals and natural resources. Canada needs our semiconductors, and ICT (information and communication technology) products and electronics.”
In an interview with B.C. Business magazine, she spoke of the potential for expansion in two-way investment and trade, focusing on renewable energy, electric-vehicle technology, tourism, food, and agri-technology.
Her optimism is shared by the Canadian government which has begun formal negotiations with the Taiwanese government for an investment agreement.
Mary Ng, Canada’s Minister of International Trade, and Taiwan’s Minister-without-Portfolio, John Deng, met virtually on February 7 to kickstart talks for a foreign investment, protection arrangement (FIPA) that would encourage and protect investments from both sides.
Third, Metro Vancouver has a relatively high concentration of Taiwanese Canadians that offers the province a unique human resource advantage for building broad cross-border ties.
Of the 150,000 people of Taiwanese descent in Canada, Ms. Liu estimates that 44,000 reside in western Canada, mostly in B.C.
“Most of the Taiwanese people here are proud dual citizens of Taiwan and Canada,” she said.
Many are successful professionals, businesspeople, or public officials. They include prominent political figures like Anne Kang, Bowinn Ma, and Katarina Chen who are members of B.C.’s ruling NDP government. Ms. Kang and Ms. Ma are among the 23 full ministers (7) under Premier David Eby’s government while Ms. Chen, who recently elected to step down from Cabinet for personal reasons, remains a member of the legislative assembly.
Canada’s Indo-Pacific strategy
B.C.’s vibrant Taiwanese community plays well into Canada’s new Indo-Pacific strategy (8) that was unveiled by Minister of Foreign Affairs Melanie Joly last November.
The strategy consists of five goals (9) to keep Canada engaged in the region while countering an increasingly aggressive China. They include promoting peace in the region, expanding Canada’s trade, investment, and supply-chain resilience, boosting people connections, and building a sustainable and green future.
Taiwan ticks all the boxes in the strategy’s list, with B.C. particularly strong in the ‘people connections’ department. Significantly, the province accounts for more than 43% of Canada’s exports to Taiwan.
Ms. Liu, a career diplomat who served a total of 12 years in the United States before being promoted to her current position in September 2021, said the Taiwanese community is more visible and likely more influential in Metro Vancouver compared with those in Houston in Texas and Los Angeles in California.
While the Taiwanese communities in Houston and Los Angeles are larger than Metro Vancouver’s, they are much smaller in proportion to the populations of the two major sprawled-out U.S. cities.
As a result, Ms. Liu observed: “It is easy for people to meet up, do business and hold events in Metro Vancouver.” Over the years, the community has developed an active calendar of social and cultural events that are open to all Canadians.
The Taiwanese Canadian Cultural Society (TCCS) and the Asian-Canadian Special Events Association (ASCEA) lead these annual initiatives, including the Taiwanese Canadian Cultural Festival (10) in July and Taiwanfest (11) in September.
Charlie Wu, ASCEA’s managing director, is also the general manager of the non-profit Society of We Are Canadians, which organizes the Jade Music Festival and publishes the Pancouver (12) website dedicated to cultural news and events in Canada. Pancouver is edited by Vancouver’s veteran journalist Charlie Smith.
The festivals and Pancouver feature not just Taiwanese art and culture, but also Canadian and other Asian talents as well.
The inclusive nature of the events translates into increased interaction between Canadians and Taiwanese that will no doubt help business and official relationships.
“I have never seen three Taiwanese-born state legislators in a single state in the United States. But here in B.C., we have three Taiwanese-born members in the legislative assembly. This is quite unique,” said Ms. Liu.
Reflecting the changing geopolitical landscape, Paul Evans, an international relations expert at the University of British Columbia, said he expects an increase in people-to-people ties between Taiwan and Canada.
He foresees an uptick in interactions “involving institutions such as universities, more parliamentary links, and support for Taiwan’s possible inclusion in some trade agreements and functional organizations related to health.”
Mr. Evans, a professor at the UBC’s School of Public Policy and Global Affairs, added: “There may also be more space for Taiwan officials and politicians to visit Canada.”
Taiwanese businesses in B.C.
Some of Taiwan’s biggest and best-known companies are already active in Canada, especially in B.C. They include Eva Air and China Airlines, which together operate an average of 14 weekly flights between Taipei and Vancouver, said Ms. Liu.
Yang Ming Marine and Evergreen Marine, both global brands with a major presence in the port of Vancouver, are key players in shipping industrial, commodity, and consumer goods between Canadian and Asian ports.
“Air and sea traffic between Canada and Taiwan are now back to their pre-pandemic levels,” she said.
Some of Taiwan’s leading financial institutions, Mega International Commercial Bank Co, CTBC Bank and First Commercial Bank, have branches in Metro Vancouver to serve the growing number of retail and corporate customers with exposure to both economies.
Natural resources account for the bulk of B.C. exports to Taiwan. They include metals such as nickel, copper, iron, and aluminum, and agricultural and food products such as soybeans and seafood, along with forestry raw materials.
From Taiwan, B.C. imports ICT products, electronics, automobile parts, bicycles, aircraft components, athletic wear, and sports accessories.
But this trend is ripe for disruption as the new businesses aiming for growth in both markets are innovators in the emerging areas of renewable and clean energy, food technology, electronics, and electric vehicles.
Last October, Vancouver’s Damon Motors signed a strategic partnership agreement with Taiwan’s Sinbon Electronics. Sinbon, a world-leading provider of integrated design and production services for electronic components, will provide premium engineering services during the design and manufacturing stages for the electrical assembly used in Damon’s line of electric motorcycles.
A month later, Taiwanese tech giant Foxconn and Canadian national research organization Mitacs agreed to jointly develop electric vehicle software and human-machine interfaces, with plans for the establishment of a software research centre in Canada.
Taiwan’s E-One Moli Energy or Molicel, which manufactures rechargeable lithium-ion cells and batteries, has announced plans to expand its production line in Maple Ridge, B.C. to meet the growing demand for its products in North America.
These are the businesses coveted by B.C. that Taiwan is offering to invest in Canada.
But the new generation of tech-linked businesses isn’t just flowing from Taiwan to Canada.
“Vancouver’s Lululemon has a dedicated team on the ground in Taiwan that is currently working with Taiwanese textile companies to develop cutting-edge fabrics,” said Ms.Liu.
Lululemon, a world-leading athleticwear company, is collaborating with LanzaTech and Taiwan’s Far Eastern New Century to create the world’s first fabric made from captured carbon emissions.
She also cites the example of Vancouver’s JustKitchen which recently signed an agreement with President Chain Store Corporation, the operator of Taiwan’s 7-Eleven convenience stores, to enhance food delivery systems and ready-to-eat meal options on the island.
These are all the early signs of a relationship quietly flourishing under the long shadow of China’s threat to eventually “reclaim” the island republic. Yet, the threat is also contributing to the urgency for Canada and B.C. in particular to double down on expanding ties with Taiwan and its business communities.
The long shadow of Xi Jinping’s plan for “reclaiming” Taiwan still looms. But for Canada, and especially B.C., the focus is on growing the relationship with Taiwan and its business communities.
Ng Weng Hoong is a Vancouver journalist focused on China and Chinese issues.
NOTE: This is a longer version of the May 30, 2023 story, “How B.C. is playing a major role in the growing trade ties between Taiwan and Canada”, in B.C. Business magazine. See: https://www.bcbusiness.ca/How-BC-is-playing-a-major-role-in-the-growing-trade-ties-between-Taiwan-and-Canada
FOOTNOTES
1. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1210011901
International merchandise trade by province, commodity, and Principal Trading Partners
2. https://thediplomat.com/2022/12/china-slaps-export-bans-on-taiwanese-goods-again
Brian Hioe, December 16, 2022. China slaps export bans on Taiwanese goods – again
3. https://www.voanews.com/a/latest-us-delegation-departs-taiwan-following-recent-wave-of-visits/6737941.html
Erin Hale, September 09, 2022. Latest US delegation departs Taiwan following recent wave of visits
4. https://www.reuters.com/business/cop/taiwan-welcomes-first-official-european-parliament-delegation-2021-11-03
Sarah Wu and Yimou Lee, November 3, 2022. Taiwan welcomes first official European Parliament delegation
5. https://focustaiwan.tw/cross-strait/202210030018
Emerson Lim and Matthew Mazzetta, October 3, 2022. Indian MP calls for closer ties with Taiwan to counter China’s ‘bullying’
6. https://www.dw.com/en/how-much-does-taiwan-depend-on-china/a-62725691
Thomas Kohlmann, August 6, 2022. How much does Taiwan depend on China?
7. https://vancouverisland.ctvnews.ca/b-c-premier-david-eby-unveils-new-cabinet-of-23-ministers-1.6184506
The Canadian Press, Dec. 7, 2022. B.C. Premier David Eby unveils new cabinet of 23 ministers
8. https://www.international.gc.ca/campaign-campagne/indo-pacific-pacifique/index.aspx?lang=eng
Government of Canada, November 27, 2022. Canada's strategy for the Indo-Pacific
9. https://www.canada.ca/en/global-affairs/news/2022/11/canada-launches-indo-pacific-strategy-to-support-long-term-growth-prosperity-and-security-for-canadians.html
Government of Canada, November 27, 2022. Canada launches Indo-Pacific Strategy to support long-term growth, prosperity, and security for Canadians
10. https://tccs.ca/en/events
Taiwanese Canadian Cultural Society
11. https://vancouvertaiwanfest.ca
TaiwanFest
12. https://pancouver.ca
Pancouver