News Story: CATA hopes matchmaking will help drive Chinese reform
September 11, 2006

By Jim Donnelly, Ottawa Business Journal Staff
Mon, Sep 11, 2006 12:00 AM EST

It's not every day a high-technology organization pins its hopes on "Sea Turtles," but CATA president John Reid says the association's newest initiative to link China and Canada's high-tech markets will sink or swim on exactly that.

"These are people returning to start the so-called Chinese dream," he says, explaining that "Sea Turtles" refers to foreign-educated Chinese nationals returning home to work in the Sino economic powerhouse.

"They're internationally educated, and so have inherited the approaches and systems that are American and European," he says. "And if you look at that, it can significantly drive corporate culture."

China is in for big changes, says Mr. Reid, and Canada's largest technology association hopes to cash in on the country's "reverse brain drain." Though they've been involved with Chinese-Canadian business since 2004, Mr. Reid says their most recent move - establishing a database of Chinese firms, called the International Membership Category, that he says Canadian firms can do business with - takes things to a new level.

"There's particular interest in the contact database in China," he adds. CATA is also leading a mission to the ITU Telecom World conference this December in Hong Kong.

The idea, says Mr. Reid, is to act as a third-party trade organization to bring business together - an international matchmaker, so to speak. "We're going to have the Chinese industries also describe their capabilities, so we end up playing an early brokerage role in speeding up business."

Mr. Reid says CATA has added 16 Chinese firms to the database thus far, with hopes of an eventual 50 or so IT and other high-tech contacts for Canadian companies to mine for resources. A consultant stationed in Shenzhen does most of the ground work for the organization.

Which is exactly what they need to succeed, says OCM Manufacturing chief Michel Jullian. He traveled to China a couple of years ago on his own looking for contacts, and though he's happy with the way things turned out, he says CATA's database will likely be a boon for rookie companies looking to outsource to China.

"I think what they're doing is laudable," he says. "Ultimately, it'll work if you have somebody on the ground that you can trust, and somebody that you can rely on if there are problems - because there will be problems, you can't have suppliers across the Pacific 12 hours away, and not have problems.

"And you don't want to discover those problems when the goods are here."

After making landfall in Beijing, Mr. Jullian soon hooked up with a partner of his own -someone who could interact with the locals, drive hard bargains and ensure fair dealings. Now, his high-tech manufacturing business has a purchasing office in Shenzhen and receives more than half of its supplies from across the pond, though Mr. Jullian says he still must be vigilant.

China, after all, recently demonstrated that it's still prone to labour violations after Apple Computer came under fire for excessive labour practices. A British media report on one of its iPod factories run by Taiwanese company Foxconn Electronics alleged labour conditions of 60-hour, six-day weeks accompanied by regular disciplinary drills, contrary to Apple's own labour standards.

Indeed, bad press like this puts some Canadian companies off for good. C-COM Satellite's Leslie Klein says there's no reason for him to outsource any part of his operation to China - it's simply not worth it.

"You can walk over there and discuss issues," he says, with reference to his local suppliers. "When it's being done in China, that's just about impossible. While it is possible to go back and forth in terms of e-mail and drawings or whatever, the ability to hop over and look at problems, and look at improvements and all that definitely has tremendous value to us."

But most in the industry seem confident their contacts are on the level, says Mr. Reid, and CATA's initiative can only help ensure proper partnerships. "Obviously all citizens of the world share concerns over (human rights and labour practices)," he says. "Business people can express their beliefs, but at the same time it's part of an education and transformation that's quite political. One can have concerns in any economy, but that concern will not materially affect the success or failure of your business venture."

Concurrently, he says the sea turtle phenomenon - and continuing exposure to the west - is changing Chinese corporate society to be adaptable to North American demands. "For example, the duties on IT products have moved down to zero," he says, allowing greater movement of products.

"The Chinese and the Indians are (now) actually understanding how they have to set their investment conditions to accelerate the growth of the economy," he says. "The business language is becoming very common, and they're beefing up considerably their enforcement of intellectual property rights.

"When you add all these things up, yes there are risks and bumps but the bumps are becoming less bumpy. And that's the wave that's hitting us. And what CATA is doing is trying to put the business intelligence on the table through collective discussion."