In addition to expanding deeper into the U.S. market, Bouchard believes it’s only a matter of time before Couche-Tard overtakes Japanese-owned 7-Eleven to become the world’s leading convenience store chain. “There is no doubt in my mind we will be larger,” says Bouchard, who does not rule out the possibility of one day buying his bigger rival. And why not? For the boy from Baie-Comeau, anything is possible — and that goes for Canadian companies across the board. Says Bouchard: “Wake up, the market is there, just take it. You’re good, and you’ll be better in the States, or anywhere else. It’s clear, clear, clear.”
8 MULTICULTURAL MEAL TICKET,
OR MULTIPLE SOLITUDES?
“Canada has all the nationalities, all the languages, all the cultural understanding you need to have. We should be the best in the world in this, and we are not.”
DESZÖ HORVÁTH, DEAN, SCHULICH SCHOOL OF BUSINESS,
YORK UNIVERSITY
“DON’T TALK TO me about China,” mutters a prominent businessman from his well-appointed office in downtown Calgary. He’s done deals across the globe and travelled the world over, but when talk turns to the emergence of the Asian giant, his face puckers into a dark scowl. “It’s horrible. So big, everything so staged, all that protocol,” he complains. “You have to talk through an interpreter and you never know what the hell is really going on.” His experience reflects that of many who have tried to penetrate the notoriously difficult market. Between the language, the politics of face and guanxi— the power of personal relationships — the real wonder, say those familiar with the market, is that we manage to do any business at all.
It’s even more true for Canadians. Rarely venturing beyond the northern United States for business and never having colonized another country, Canadians are less adept than many at deciphering the finely spun layers of cultural nuance. “I don’t think most Canadian businessmen understand what it’s like to work in China, what it takes or how it works,” confides a prominent Toronto Chinese-Canadian entrepreneur. Mainland Chinese seem to have the same impression. Edy Wong, director of the Centre for International Business Studies at the University of Alberta School of Business, says he’s always asked the same two questions on his frequent trips to the People’s Republic. “The first is, why is it that Canadians don’t come here, and second, when they do come here, why is it they have absolutely no idea how to work here?”
Yet the key to solving the Chinese puzzle may be closer than many Canadians realize. Just a few short kilometres southeast of downtown Calgary, Simon Feng is senior metallurgist and director of r&d at Standen’s, a century-old leaf-spring and suspension-parts manufacturer. To Feng, who immigrated to Canada in 1998 from China and speaks with a heavy Mandarin accent, manoeuvring through China’s seemingly inscrutable business culture is as natural as eating with chopsticks. “I find it very straightforward, very easy,” shrugs the engineer, who is now spearheading the company’s plans to set up a manufacturing base in Xuzhou, a transportation hub midway between Shanghai and Beijing.
While many foreign companies are worn down by China’s heavy-handed bureaucracy or duped by unscrupulous local partners, Standen’s has quickly clinched deals and secured approvals as a result of Feng’s vast network of contacts. A former professor at Jiaotong University in Xi’an, Feng also worked in the private sector, heading up the first joint venture for Mazda, the Japanese automaker, in China. When it came to drumming up business for Standen’s in China, he tapped former colleagues and students to find out which companies were using what products. As it turns out, Feng’s former students are high-level managers at five companies that are all now Standen’s customers.
“One of the advantages for me is I have a lot of connections. I was a professor for ten years, so whatever city or company I’m dealing with, somebody knows me,” he explains. “It’s very easy to do business because my friends are managers, and the Chinese really respect teachers.”
Feng’s case is unique because he was among the first Chinese youth to attend university after the upheavals of the decade-long Cultural Revolution, during which post-secondary schools were closed. At the age of fifteen, he won second place in chemistry and a fourth in physics in nationwide competitions, and was among two dozen high school students, known as the “genius class,” chosen from across China to continue their education. Feng was offered a scholarship to do his graduate work in the United States before the Chinese government sent him to Japan’s Osaka University, where he earned a PhD in material science and engineering. Despite his credentials, however, it wasn’t easy to find work when he first arrived in Canada. For the first year that Feng lived in Toronto, he worked for a former student repairing tires as well as for a lumber company. Through other friends from Japan, he got a job rebuilding mechanical equipment for resale to China. Like many new immigrants, he found he couldn’t get a job in the mainstream without Canadian experience.
“It was very frustrating,” says Feng, now in his forties. “They kept asking if I had Canadian experience. That’s really stupid. I have so much experience all over the place, what difference does it make if I have Canadian experience? So what if I got six months of Canadian experience? Is it worth anything? It’s amazing — I find it very hard to understand.”
Eventually in 1999, Feng saw an ad asking for a metallurgist at the Standen’s plant in Calgary and applied. He got the job and, being the most educated person in the company, quickly moved up the ranks. It didn’t take long for him to realize that the manufacturer would have to start seriously thinking about moving into China if it were to remain competitive. A number of Standen’s customers in the United States, where the company does most of its business, had built plants in China and were looking to the Calgary parts maker to supply them locally. Feng saw that if Standen’s didn’t make the move, local Chinese manufacturers would copy their products in no time and then sell them at half the price. “If we don’t produce in China we’re going to be in big trouble because not only will our customers buy in China, but they’ll import from China to North America, and then we’ll lose everything,” he says. “If we build in China, it lowers our costs and opens up a big market for our product.”
But while moving to China seems like the obvious answer to Feng, he has encountered heavy opposition from within the company. Although some managers and staff, particularly those who have been to China, are embracing Standen’s bid to establish a supply-chain complex together with its U.S. customers, others continue to resist the venture, fearful of China, afraid of the risk and of what it will mean for their jobs. Feng has worked hard to change the mindset, but he admits it’s slow in coming, particularly when time is of the essence. “Everybody agrees we don’t have much of a choice,” he says. “But people are still nervous because they don’t know China very well and they don’t want things to change.” Since setting the process in motion in 2004, Feng hopes the company will finally begin construction on a seventy-acre plot at the end of 2006. Ironically, while outsiders often complain of China’s endless red tape and interminable decision-making process, it’s the Canadians that Feng can’t figure out.
THE HIDDEN ADVANTAGE
There is arguably no other city in the western hemisphere as intuitively Asian in feel as Vancouver. You see it in the throngs of shoppers walking along Robson Street, you can taste it in the myriad restaurants burrowed into every downtown nook and cranny and you sense it in the sinuous architectural lines of gleaming new high-rise towers and condominium complexes. In 1997, at the peak of the influx of Hong Kong immigrants to the city, Time magazine christened Vancouver “Asia’s new capital.” Already the world’s fourth-most-multicultural city, with 37 per cent of its residents foreign-born, Vancouver’s Asian flavour is expected only to deepen as mainland China and India continue to be the leading sources of new immigrants to Canada. By 2020, half the people living in Vancouver and in Canada’s largest city, Toronto, will hail from abroad, including a disproportionate number from the world’s fastest-growing and most
dynamic economies. The question is, what are we doing to harness this resource?
Since Canada is home to two of the most culturally mixed cities in the world* and boasts the second-highest proportion of foreign-born residents after Australia, multiculturalism is arguably the country’s most defining feature. To many, it’s also Canada’s most powerful asset. Equipped with the language skills, cultural knowledge and contacts that so often elude native-born Canadians, new immigrants might be the missing link that could pave Canada’s way into hard-to-penetrate markets. With one foot in Canada and the other in their country of origin, these cultural double agents have the ability to act as trade bridges, either by filling in knowledge gaps and lowering the fear factor involved in foreign ventures or infiltrating ostensibly closed societies and forging relationships, while reporting back home in a language Canadian companies can understand.
Daisy Wai, the former president of the Richmond Hill & Markham Chinese Business Association, is a long-time advocate of tapping into the Chinese Canadian community. “They already have the connections, the guanxi, they know where, they know who. Business is like a chess game in China, and they can play it; the Canadians cannot,” she says. “We can read their behaviour— it’s beyond words and very hard to explain, but we understand it.” Pradeep Sood, an adviser to the Indo-Canada Chamber of Commerce, has also worked hard to promote cross-cultural business ties. “We can tell you all about corruption in India. We’ve been through it, so you don’t have to spend thousands of dollars to learn it,” he says. “We’re able to provide connectivity — the people-to-people linking can be brought to the table by us.”
Yet while Canada is in an ideal position to mine this multicultural resource to gain competitive advantage, the opportunity has largely languished. Like an invisible vein of gold running through the heart of the country, multiculturalism is changing the face of Canada, yet paradoxically remains what the Asia Pacific Foundation of Canada describes as a “hidden advantage.”109 “The concentration of Canadian Asians in a few cities, especially Vancouver, will, over time, stand out as the distinguishing feature of Canada,” the think-tank wrote in 2002. However, it noted, “Whether this pool of immigrant talent translates into more and deeper Canadian business ties with Asia is still unclear.”110
In fact, as Harvard professor Michael Szonyi wrote in a paper for the Asia Pacific Foundation of Canada in 2003, there is “a striking disjuncture” between the huge migration flows from South Asia and Canada’s limited economic links to the region.111 Canadian trade and investment remain minimal, while nascent efforts to connect ethnic business groups with mainstream Canadian companies have largely fallen flat. “Toronto’s Chinese community is a wealth of knowledge when it comes to doing business in that part of the world,” says Tim Reid, former president of the Canadian Chamber of Commerce. “Have we taken advantage of the fact that we have this tremendous knowledge base and family connections? We just haven’t mobilized the resource.”
In 2002, Vancouver’s largest Chinese community group, the United Chinese Community Enrichment Services Society, using government funding, attempted to bridge the divide through an innovative program called Gateway to Asia. It assembled a database of 650 recently immigrated Chinese businesspeople, 40 per cent of whom had or continued to own a business in China. They were given training on how to do business in Canada and were taken to trade fairs and missions around the province in a bid to take advantage of their connections back home. For the most part, however, the Canadian companies they contacted did not respond to their emails or return their telephone calls, says Albert Yu, the program director. “It’s been very slow in coming. Canadians are not big adventurers.”
Even more striking is the inordinate number of highly skilled immigrant professionals who are unable to find jobs in Canada. Stories abound of engineers and computer programmers working as taxi drivers and cleaners. In a 2004–2005 survey of 245 Chinese households in Vancouver, over 60 per cent said their employment situation in Canada was worse than it had been in China. The poll, conducted by researchers for the Vancouver Metropolis project, found that 44 per cent reported earnings of less than twenty thousand dollars a year, even though 73 per cent had post-secondary education, including 27 per cent with a master’s or doctoral degree.112 Other sources also showed that 25 per cent of recent immigrants with university degrees were working at jobs that required a high school diploma or less.113
In fact, educated new immigrants are faring worse than the Portuguese bricklayers and Ukrainian farmers who arrived in Canada thirty years ago. Their unemployment rate is double that of native-born Canadians, while those with jobs earn, on average, 40 per cent less than Canadians with the equivalent qualifications. The Conference Board of Canada calculates that the failure to maximize immigrant skills costs the Canadian economy up to $5 billion a year.114 The cost to the immigrants is incalculable. “There are a lot of Chinese Canadians that are suffering,” says Wai, who counsels at her local church in the Toronto suburb of Richmond Hill. “They make a lot of sacrifices to come here, they are in the prime of their life and their skills are not being used. They feel useless and ashamed. They spend their time in the mall doing nothing or watching television at home. Some are even committing suicide. This is not a life people want.”
The worrying trend has prompted researchers to investigate the root cause of what Li Zong, a sociology professor at the University of Saskatchewan, describes as “a complete waste of human capital.” What they have found is that it can almost entirely be explained by a near-blanket disavowal of foreign work experience; as a study by Statistics Canada in 2005 revealed, foreign experience garnered a zero return on immigrant earnings.
Why Canadians put so little value on foreign experience is hard to explain. Some observers point to systemic discrimination and have coined phrases like “democratic racism.” But if you place the problem within Canada’s historical business context, it actually makes perfect sense. Entreated to stay home and build walls while telling themselves that they produced the best the world had to offer, Canadians naturally assume their skills are superior. More importantly, there has never been a need or a frame of reference for attaching value to skills and abilities outside the Canadian context. Which is why, when the world is globalizing at a dizzying rate, employers are concerned with how “Canadianized” immigrant employees are rather than with the new skills and languages they might bring to an organization.
It’s as if Finland’s tiny population of five million people decided they didn’t need to speak any language except Finnish to get along. They’d be stuck in Finland. Which is why the Finns and the Dutch and the Swedes speak three or four languages. With 33 million Canadians in the world and 1.3 billion Chinese, “the Canadian Way” will likely not prevail as a standard for global competitiveness. Instead of trying to figure out how an immigrant will fit into their organization, companies should be looking at how new Canadians can help them fit into the global marketplace.
Unfortunately, Canadians’ inverted view of the world is reinforced by boards of directors and executive management that continue to be overwhelmingly dominated by, well, white guys. According to the Spencer Stuart Board Index, visible minorities made up just 1.7 per cent of Canadian boards of directors in 2003. In a 2004 survey of seventy organizations, the Conference Board of Canada found that just 3 per cent of executive positions were filled by minorities. Without people from different backgrounds involved in the actual decision-making process, it is difficult for any organization to open itself up to new concepts and ideas, let alone have the confidence or wherewithal to bet the company’s future on the banks of the Yangtze.
“We have this amazing diaspora of smart people from India, China, Russia, and if we could find a way to plug them in, they might be the key that unlocks the door,” says Glen Hodgson, chief economist at the Conference Board. “But we haven’t found a way to use them. We don’t have them as senior advisers on boards. They’re doing their own thing and some may be d
oing fairly well, but they are not integrating into our society.”
Since immigrating to Canada from Hong Kong in 1966, David Fung has done exceptionally well. Starting out as a penniless young student in Montreal, where he earned a doctorate in chemical engineering, Fung went on to become a research manager at paint company c-i-l before heading up Chemetics International Co., a $200 million outfit with chemical plant projects on six continents. In 1989 he launched his own company, acdeg International, which essentially capitalizes on Fung’s cultural adaptability in acting as a high-end middleman between Canadian resources, European technology and Asian money. He now spends much of his time “writing cheques” to various philanthropic causes and sitting on the boards of numerous institutes and associations.
Not surprisingly, multiculturalism is a cause that’s near and dear to Fung’s heart. The only Chinese Canadian on the board of the Canadian Manufacturers and Exporters Association, he goes around the country giving speeches on the need to bridge the divide between native-born Canadians and their immigrant bedfellows. But after all this time, Fung, who lives in Vancouver, concedes that it’s a fine line between multiculturalism and “multiple solitudes.” “We are our own biggest hypocrites. We profess this ideal, but internally we don’t embrace it,” he says. “The ‘hidden advantage’ is only an advantage if you use it. Otherwise it’s no advantage at all.”
SQUARE PEGS AND ROUND HOLES
In 2003 the Bank of Montreal (BMO) became the first foreign institution to acquire a stake in a leading Chinese mutual fund company, and in 2006 it was among six firms chosen from around the world to underwrite the Bank of China’s us$10 billion ipo, one of the country’s biggest to date. That same year it also became the first Canadian bank to be given approval by Chinese authorities to provide banking services in Beijing in local currency. BMO boasts a small, three-person investment banking unit in Beijing, as well as branches and representative offices in Shanghai, Guangzhou and Hong Kong. It may not be diving full bore into the Chinese financial market, but at the very least it is dipping a very serious toe, if not an entire foot.
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