At the British Columcia Natural Resources Forum, January 12, 2011
Minister Pat Bell, and Ladies and Gentlemen,
Good morning
Thank you for inviting me to address this important gathering today. Prince George always has a special meaning for me. It was the first city I visited in British Columbia after I arrived in this province two years ago, to take up my post as Consul General of Japan.
The usual practice in the diplomatic world, is first to go to meet the Lieutenant Governor of British Columbia, and introduce yourself as a representative of your country; but, actually, I came to Prince George, even before I went to Victoria.
What drew me here, was my desire to attend the inaugural ceremony to establish Dr. George Iwama as President of the University of Northern British Columbia. I wanted to congratulate him as the first person of Japanese origin to lead a Canadian university. During that visit, I was able to also meet with various students from Japan who are studying at the university, and I was very pleased to learn from them that they were comfortable here, and that they were well received by the people of Prince George.
There is another reason why I first came to this city. The Pacific Western Brewery is headquartered here. The company owner is Ms. Kazuko Komatsu who is originally from Japan, and she wanted me to see her brewery. I was happy to go. The Western Pacific Brewery is a good example of the marriage of Japanese investment and the natural resources of British Columbia. In this case, the brewery relies on the naturally pure water that is found here in Prince George
Soon, I was being guided around the brewery. My host insisted that I sample each of the types of beer that the brewery produced and by the end of our tour, I must confess that I was quite drunk.
Fortunately or unfortunately, on this occasion today, I have to rush back to Vancouver after my speech here, to receive an important guest from Japan. I won’t have time to visit the brewery.
Because of these happy experiences, when the Honourable Minister Pat Bell wrote to me in November and asked that I address this Forum in Prince George on the subject of “Trading in the Asia Pacific Gateway”, I was pleased to answer positively.
2. Asia Pacific
Not so long ago, Asia was often described as “stagnant” and one often heard rather pessimistic views that Asia would never obtain prosperity. Indeed, during the 1960s and the 1970s, many African countries enjoyed higher per capita Gross National Product than Asian countries like Indonesia， China and India. However, since the mid-1980s, Asia has been achieving such high economic growth that it is sometimes referred to as the “miracle of East Asia’.
Japan played not a small role in providing those countries with various forms of financial and technical assistance that helped to bring about this rapid economic development among Asian countries. For example, when a financial and currency crisis struck the region and inflicted a severe economic blow in 1997, Japan actively provided support. Now the Asia Pacific region is considered as the growth centre of the world economy. According to the World Bank, real GOP growth in East Asia and the Pacific is estimated to increase by 8.9% in 2010. In addition to China, five other countries are projected to expand by 7% or more: Thailand, Malaysia, Lao, Mongolia and Papua New Guinea. Also, in terms of population, China, Indonesia, Japan, the Philippines, Vietnam, Thailand are all within the top 20. Asia Pacific is a huge market that is growing rapidly.
Within this world context，British Columbia’s strengthening of its Asia Pacific Gateway for trade between Canada’s west coast and the Asia Pacific region is a smart and timely initiative. If we look at the exports for goods that originate from this province and are shipped to the Asia Pacific, the value has been rising steadily, from just over 8 billion dollars in the year 2000 to almost 11 billion dollars in 2008.
There was a dip in BC exports in 2009, due to the global economic recession, but in the latest figures, from January to October of 2010, the value of BC exports to Asia Pacific has rebounded to almost 26% above the same period a year earlier.
The encouraging pattern of BC exports to Asia Pacific stands in contrast with this province’s exports to the US. The fact is that the value of BC’s exports to the US has generally stagnated or declined between the years 2000 and 2009; and the rebound in value for the January to October 2010 period is only 3.3% above the same period in 2009.
3. BC and Japan
Of course, as Consul General of Japan, I would like to concentrate especially on the economic relations between BC and Japan.
It is unfortunate that some people have come to believe that Japan is no longer important for trade with BC. That perception does not correspond with the reality. The fact is that after the US, Japan is British Columbia’s largest market for exports. Our country is a major consumer of BC natural resources, mainly coal, minerals, lumber and pulp.
The record of imports from Japan through British Columbia is also interesting. Since the year 2000, imports from Japan have been slowly declining, now occupying third place, after the US and China. The figure for imports through BC from Japan in 2009 is almost half of the value of imports for the year 2000. This however, doesn’t mean that the economic relationship is deteriorating.
The fact is that most imports to British Columbia are automobiles, and increasingly those automobiles are being manufactured here in Canada, rather than being shipped over from Japan. Toyota and Honda have both established factories in Ontario. And those made-in-Canada automobiles are bought and driven here in this province
The reality is that declining imports from Japan are actually a sign that the economic relationship between my country and Canada – and between Japan and British Columbia – is succeeding. It is becoming deeper and more mature, through Japanese investment in this country.
This is why I think it is important for me to emphasize whenever I have an opportunity ， that Japan is an important economic partner with British Columbia At this point, in order to avoid being misunderstood, I would like to make it clear that it is not my intention here at all to compete with China. China is now Japan’s largest trade partner for the last three years, up to 2009, surpassing the US. And for China, Japan is the second largest single trading partner, after the US. Clearly there is a strong mutual interest between each country, in our trade relationship
Although it is not well known, unfortunately even among Chinese people themselves, Japan had been providing China with Yen loans from 1979 to 2007, which amounted to more than 3 trillion Yen, the equivalent, at the current rate of exchange, to about 38 billion dollars. About twenty years ago, I was working in a division in the Ministry of Foreign Affairs which deals with overall Japanese foreign policy toward the Asia Pacific region. At that time, I was frequently asked the same sort of question by journalists from ASEAN countries. Their question was: in assisting China in its economic development, don’t you think that you are producing your competition? My answer was simple. You cannot change geography. But when you can choose whether you have a prosperous and stable neighbour, or whether you have a poor and unstable neighbour, I think the answer is clear. That is exactly why my government was contributing to China’s prosperity
Canada has a big and powerful neighbour, maybe too big to some. But if the US were a poor and weak country, what would happen to Canada? China’s prosperity is in Japan’s interest. China’s development is something to be congratulated and certainly not something to be concerned about. The question is not how to compete with China and other Asian countries. Rather, the real question is how to prosper together.
Against this international background, there is emerging a new layer of economic cooperatjon between my country and British Columbia that goes beyond our bilateral relationship.
I am referring here to the opportunity for doing business together within the context of the whole Asia Pacific region. The Government of British Columbia, in partnership with Canada’s federal government， is currently investing a great deal of money to strengthen the infrastructure on the west coast that is so important for international trade. There are major improvements in railway, road and port development for what is called the Asia Pacific Gateway. Building this Gateway is how British Columbia and Canada is reaching out to markets in the Asia Pacific.
As part of this reaching out, I want to remind business leaders in British Columbia that you have many good reasons to include Japan as part of that initiative. Due to Japan’s geography and long history, our country has developed a strong expertise about the Asian market. More than 40% of Japan’s trade is with countries in Asia. And Japan’s direct investment in Asian countries surpasses its investment in North America.
Japanese businesses can be knowledgeable partners with Canadian companies, in the countries of Asia, through joint ventures and other forms of economic cooperation. Working together, it is possible to achieve a positive outcome where Canada benefits， Japan benefits and other Asian countries also benefit: a “win – win – win” solution.
This is not just an abstract desk theory. In fact, this kind of integrated economic cooperation is already occurring. For example， there is a Japanese owned marine products company in Richmond, BC, that is catching Angler fish. Canadians don’t eat Angler fish, I believe. In Japan, however, the meat of the Angler fish is highly valued for its taste, especially in the winter. In particular ， its liver is a delicacy, a sort of “Japanese fois gras”. That Japanese owned company sends Angler fish to China for processing, before the final product is re-exported to Japan. Japanese trading companies are another example. Trading companies, such as Mitsubishi and Mitsui and Sumitomo and others, are perhaps a unique feature of Japan’s economy. But in recent years, rather than simply buying and selling， many of these companies are now investing in Canadian businesses, in such fields as the mining and food industries. They are then exporting those products to Japan, or for example, exporting Canadian pulp or coal to China; or in other cases, exporting iron ore to somewhere else in Asia. There is emerging a new pattern of regional interdependence and cooperation in the Asia Pacific area. It is a trend that will only become stronger in the future, and presents a real opportunity for businesses from British Columbia and Japan to work together in Asia
During the APEC Summit meeting, which was held in Yokohama last November, Prime Minister Harper met with Japan’s Prime Minister Kan Together they had positive talks about a possible Economic Partnership Agreement between Japan and Canada. Such an agreement would certainly facilitate Japan – Canada economic cooperation
4. Japan and the BC Forestry and Mining Industries
Now, ladies and gentlemen, let me turn to the central aspect of my topic. I am here at the request of Minister Pat Bell , BC’s Minister of Forestry， Mining, and Lands, and in response to that request, I would like to speak about Japan’s activities in the economic sectors under his ministry
First, about forestry. Everyone knows that Japan is traditionally, a large buyer of BC lumber. And it is true also that China is rapidly increasing its purchases of lumber from BC. However, Japan continues to be a steady and reliable buyer of high quality BC wood. The Chinese market tends to purchase a utility grade of lumber from this province, but because these purchases are rapidly increasing, the newspapers and commentators tend to focus on the importance of the Chinese market.
The fact is however, that in terms of value, Japan is this province’s most important Asian market for solid wood products. The value of BC solid wood product exports to Japan, from January to October 2010 was 746 million dollars, whereas the figure for China was 577 million dollars
Last year, British Columbia enacted a new law called the Wood First Act, to encourage more building with lumber products. In fact, Japan has enacted a similar law itself, last spring, which encourages use of wood in public construction, such as schools and government offices etc. This law will , I hope, stimulate more demand for such products from British Columbia.
In the whole field of wood construction, Japan and Canada, and especially with British Columbia, already share a great deal of information and research in wood construction technology and building methods. BC’s Minister of State for Building Code Renewal, the Honourable Naomi Yamamoto, has just returned from a visit to Japan where BC and Japanese authorities have been sharing information on the subject of building code renewal
Nowadays, high rise buildings are constructed with concrete and steel in Japan, just like in BC. However, Japanese houses were traditionally made of wood, again, as in BC. In fact, the Horyu-ji Buddhist Temple in Nara City, Japan, is the oldest surviving wooden structure in the world. It is considered to have .been built more than 1,300 years ago. The temple is registered as a World Heritage Site. As far as wood is concerned, Japan and BC have much in common. In Japan, there are groups of people who try to restore and recycle traditional houses built of wood, paper and thatch, without nails and concrete foundations.
Mining is another field where Japanese interest is strong. Japanese companies have a number of current investments in the BC mining industry One is at the Endako Mine, which produces molybdenum, not far from Prince George. Another is the Huckleberry Mine and a third is at the Gibraltar Mine, both of which produce copper and molybdenum. There is also Japanese investment in the Similco Mine, which produces copper. These last two operations are new investments that have occurred within the last year. There was also an additional investment in the Endako Mine, last year, as well.
Japan’s Mitsubishi Corporation is also currently undertaking a new investment in the natural gas fields in north-east British Columbia.
In addition to these examples, a Vancouver based mining company announced just last week its plans to work jointly with two Japanese companies, Mitsui Mining and Itochu Corporation, to develop a zinc and lead mine at Ruddock Creek, just north of Kamloops. This announcement, occurring right at the start of the new year, may be an auspicious sign for good fortune this year in the BC mining industry.
Clearly, there is significant interest from Japanese companies in the BC mining and natural gas sectors, and there is a willingness to make more investments in these areas, if opportunities exist.
5. Future of Japan – BC Relations
As Consul General of Japan, ladies and gentlemen, I am optimistic about the future of relations between British Columbia and Japan and between Canada and Japan. There are a number of good reasons for that optimism.
First, British Columbia is justifiably proud of its strong natural resource industries. Canada has an abundance of natural resources and food sources that are vital for our economy. One example is the emerging importance of rare earth minerals for the production of high-technology devices that will only increase the value of Canada’s resources in the world. There is no doubt that BC will remain strong or will become stronger in its traditional export of natural resources to Japan.
Second, this province is also a leader in advanced technologies. Just last year, in March, the internationally known GLOBE conference and technology trade exhibit was held in Vancouver. Eleven companies attended from Japan, and out of that conference and exhibit new business ventures emerged. One new project involves the video gaming industry. There is now a growing network of video-gaming businesses that are operating between Vancouver and Seattle and Fukuoka, Japan.
What I wish to say is that beyond the natural resource sector, Japan and British Columbia also have good cooperation in the fields of information and environmental technology. For example, new electric automobiles made by Mitsubishi motors, the i-Miev, were presented to the City of Vancouver and BC Hydro in 2009 for testing and evaluation. Also, BC is scheduled to be the first Canadian province to receive the Nissan LEAF, Nissan’s first all-electric car, this year, in advance of global distribution in 2012. I hope that this cooperation will continue to grow.
Japan has achieved the highest efficiency in the world in the ratio of C02 emissions to its GOP. The latest statistics which I have from the International Energy Agency for 2008 show that in this regard, Japan’s efficiency is two times higher than that of the US; three times higher than Canada; ten times higher than China; and 19 times higher than Russia.
Vancouver City is aiming to become one of the greenest cities in the world by 2020. BC has a strong awareness about the environment. From what I hear about this province’s well developed high technology, one can expect the possibility of collaboration with Japan in this field.
After I arrived in Vancouver, I used to say to Canadian people that when I think about the future of the economic relationship between BC and Japan, three key words come to my mind: energy, environment and high technology. I still believe it to be the case.
Third, the number of Japanese visitors to BC is increasing. This increase is, no doubt, partly due to the 2010 Olympic and Para Olympic Winter Games and the resulting popularity of Canada. The figure from January to October 2010 is 14.9% above the same period a year earlier. Starting from March, Air Canada will fly daily to Haneda Airport in Tokyo, in addition to its daily flights to Narita Airport.
Fourth, there is a strong interest in Japanese pop culture among Canadian young people, in particular, with animation. I have heard that many young people started learning about Japan and the Japanese language through their interest in Japanese pop culture. I hope that this trend will lead to a more robust exchange of interested persons between Japan and Canada
Fifth, I would like to mention something that is not today’s main theme, and because as Consul General, I am not focusing on political relations between Japan and Canada, I do not intend to dwell on it in detail. However, I want to emphasize that Japan and Canada share fundamental values, such as respect for human rights, democracy and the rule of law. On many international issues we can continue to co-operate together
More than ten years ago, I was working at the Permanent Mission of Japan to the United Nations in New York and was responsible for the issue of global economic development. I remember that on most subjects, I was able to find common cause with my Canadian colleagues
Sixth, again, I will not mention it in detail, but there are severalschemes to send young Canadians to Japan to study and work there. One such scheme is the Japan Exchange and Teaching Programme. Young overseas graduates are invited to assist English language education in elementary, junior and senior high schools throughout Japan and also to help local governments in their international exchange. Since 1988, more than 7,500 Canadian young people have participated in this programme and stayed in Japan usually, for one to two years
Another is the Canada – Japan Co-op Program. It is a program to provide Canadian undergraduate university students with internships in Japanese companies for a time that ranges from four months to one year. More than 760 students have joined the program since 1992.
The alumni of these programs are all Japanese ambassadors in Canada. They are the guarantee of the friendship between Japan and Canada well into the future.
Finally, we have many sister city relations between Japanese cities and Canadian cities. We have seventy such relations. Out of that number, thirty four are between Japanese cities and BC cities. Although unfortunately, Prince George doesn’t have a sister city relation with any Japanese city, the sister city relations that do exist are playing very important roles to maintain friendship between Japan and BC and Canada at the community level
There are many people in this province who have a keen understanding of Japan, and this understanding is not just limited to those who are of Japanese descent. Because of this， and also due to the points that I have mentioned above, I am optimistic about the future between Japan and BC.
Thank you for listening