We are open to Asian investment, but cautious of big, new investors like China that have yet to prove themselves in the minds of many Canadians, a new poll by the Asia Pacific Foundation of Canada (APFC) has found.
Released this week, the Asia Pacific Foundation of Canada’s 2015 National Opinion Poll found that Canadians also tend to overestimate how much foreign direct investment in our country is actually owned by companies from China, which contributes to a sense of fear that we are that we are losing control over our economy.
And even though the poll reveals that Canadians are confident that foreign companies will abide by Canadian laws in Canada, the news we consume related to the negative activities of some Chinese corporations in China likely shapes our perceptions generally of Chinese companies abroad, APFC said.
[quote align="center" color="#999999"]The poll indicated that Canadian perceptions of investment from Japan—a country that was a security risk and an economic rival in the living memory of many Canadians—are overwhelmingly positive.[/quote]
Canadians may be apprehensive about foreign investment by Chinese companies, but according to the poll they are clearly open to persuasion through positive, demonstrable contributions to Canadian society.
Meanwhile, the poll indicated that Canadian perceptions of investment from Japan—a country that was a security risk and an economic rival in the living memory of many Canadians—are overwhelmingly positive.
China is a relatively new player in the Canadian economy, with major corporate sector investment emerging only in the past 10 years. Views toward this new economic force may indeed change over time, as they have with Japan, APFC said.
[quote align="center" color="#999999"]Canadians who significantly overestimate the extent of Chinese ownership in the Canadian economy are also more likely to say Canada has allowed “too much” investment from China to enter the country.[/quote]
The APFC’s take-away from this year’s poll: Chinese companies are in a position to favourably shape public opinion by creating a legacy of positive contribution to Canada’s economic and social well-being.
The poll also found that a majority of Canadians express positive views about investment from major Asian players, including Japan, South Korea, and India. Canadians, the poll found, are reasonably well informed about basic foreign investment rules and practices, and the most informed Canadians tend to be those who are also most supportive of investment from Asia.
Poll's Key Findings
I) Canadians are generally supportive of investment from Asia. A majority expressed positive views of investment from Japan (78 per cent), South Korea (67 per cent) and India (59 per cent). This is comparable to Canadians’ favourable views on investment from the United States (77 per cent), Canada’s largest source of foreign direct investment. Only in the case of China are opinions more mixed, with two-fifths (42 per cent) being favourable to Chinese investment and half (49 per cent) expressing opposition.
ii) Chinese investment in Canada has been a contentious topic recently, but, despite the controversies, many Canadians remain open to the potential benefits. There are, nonetheless, characteristics that often accompany Chinese foreign investment—such as the involvement of state-owned enterprises and the concentration in the resource sector—about which the Canadian public remains skeptical.
iii) Canadians worry that investment from global powers like China and the United States will lead to a loss of control over our natural resources. Almost half (48 per cent) of Canadians associate Chinese investment with the phrase “loss of control over our resources,” and two-fifths (42 per cent) associate the same phrase with investment from the United States. By comparison, less than one-fifth (18 per cent) of Canadians express a similar concern about foreign control over resources when asked about investment from Japan.
iv) Canadians estimate that companies from China own one-quarter (25 per cent) of all foreign direct investment in Canada, while the official figure is closer to three per cent. This misperception is likely driven in part by the recent increase in Chinese investment, the value of which jumped from C$0.2 billion to C$20.4 billion between 2003 and 2013. Canadians who significantly overestimate the extent of Chinese ownership in the Canadian economy are also more likely to say Canada has allowed “too much” investment from China to enter the country.
[quote align="center" color="#999999"]Barring significant socio-political change in China, Canadians are only likely to warm up to Chinese investment if they see Chinese companies making a positive contribution to Canada.[/quote]
v) A majority of Canadians know that foreign companies are subject to Canadian laws and regulations (75 per cent), that the federal government plays a role in approving large foreign investments (69 per cent), and that the majority of Chinese investment is concentrated in the resource sector (54 per cent). Close to half of Canadians (48 per cent) also rejects as false the notion that foreign-owned companies pay their Canadian workers less than Canadian-owned companies.
vi) Canadians do not always disentangle their attitudes about foreign investment from their attitudes toward particular countries. This is particularly true in the case of China. Although most Canadians recognize that foreign companies operating in Canada abide by domestic laws and practices, they still associate investments from China with terms like “environmental damage” and “poor labour standards.”
vii) The poll suggests many Canadians may not be worried about how Chinese investors behave in Canada as how Chinese companies behave in China. This presents a challenge for Chinese companies operating in Canada. Significant investment in Canada by Chinese companies is a relatively recent phenomenon. Chinese investors in Canada do not yet have a visible and established track record of contributing to the country that could be used to counter the skeptical attitudes many Canadians have toward China in general. Barring significant socio-political change in China, Canadians are only likely to warm up to Chinese investment if they see Chinese companies making a positive contribution to Canada.
viii) Almost two-thirds of Canadians (65 per cent) mention “new technologies” as a key term they associate with Japanese investment, a country that was once associated with inferior, low-end products. Canadian consumption of Japanese high-tech products, along with positive contributions by Japan to Canada’s economy like the construction of state-of-the-art car manufacturing facilities, also likely to play a role in shaping perceptions of investment from Japan. With time, it is likely that Canadian attitudes toward Chinese investment will evolve. In this regard, early Chinese investors in Canada have a special role and responsibility to facilitate this evolution by contributing to a positive legacy.
The APFC’s conclusion of the poll is that Canadians are generally supportive of investment from Asia, though their level of support varies across countries. Canadians have an overwhelmingly positive view of investment from Japan, associating it with new technologies, economic growth, and job creation. Canadians also support investment from South Korea and India.
Republished in Partnership with Asian Pacific Post.