Wanted in Vancouver: Asian corporations
HQ Vancouver is a new government program intended to pull in Asian head offices to a city gutted by decades of corporate exodus.
November 3, 2015
This article was originally featured in the November 2015 issue of Vancouver magazine.
Google “Vancouver real estate, Chinese money” and most of the results trend, shall we say, toward the alarmist. Meanwhile, south of the border, presidential candidate Donald Trump is busy whipping up anti-Chinese business sentiment. Against that nativist tide comes a determined message from Vancouver business and government. And that message is: “Welcome. And please stay.”
Launched in February, the HQ Vancouver program, a collaboration of the Business Council of British Columbia (BCBC) and the federal and provincial governments, is intended to attract Asian corporate headquarters to a city gutted by a decade-long exodus of head offices. The goal: to coax at least a couple of Asian corporations to pull up stakes and relocate to the Lower Mainland for the long haul. According to HQ Vancouver president Yuen Pau Woo, Vancouver has natural advantages that should be easy to sell to Chinese businesses. “We are closer to Asia than any other major city in North America, which translates into shorter transit times to Asia for both freight and passenger traffic,” he says. “Vancouver is Canada’s busiest deep-water port and YVR has been voted ‘Best Airport in North America’ six years in a row. We are also equidistant between Tokyo and London and operate in a time zone that overlaps with the European, Asian, and, of course, North American workdays.”
The project’s $6.5-million budget includes about $1.2 million in contributions from the Business Council of B.C., $2 million from the federal Western Development fund, and $3.4 million from the province. A few million may not seem like much to attract companies shifting billions of dollars a day, but Woo feels it’s just a matter of getting the word out to receptive ears. “Many of the potential head office investments we have identified are ones which build on an established presence in the province,” he says.
“There are many Asian business people who have strong, personal connections in Vancouver that we can look to leverage,” says BCBC president and CEO Greg D’Avignon. “For example, no one had heard of Alibaba 10 years ago, despite the founder’s son apparently going to school in Vancouver. Now they are a household name, not just in Asia but globally.”
Critics have suggested that Asian (read: Chinese) corporate headquarters would provide only lower-level jobs to locals. Wrong, says D’Avignon. “The introduction of new global talent creates new jobs, not replaces them,” he insists, citing the local apparel industry as evidence of a corporate snowball effect. “Lululemon, Arc’teryx, MEC and Aritzia for example—combined, there are over a dozen global performance apparel firms here with over 7,000 employees and $3.5 billion in sales that are poised to grow in number and size,” D’Avignon says. “Clustering fuels the tech sectors in Silicon Valley or Seattle, or the financial services sectors in New York or Toronto. Well-paying jobs in the accounting, financial, legal, and engineering sectors, as well as technology, will be created or drawn to potential clients with the emergence of new head-office clusters.”
If the theories about Chinese money inflating the local market are true, might there be an irony in the possibility that the HQ Vancouver initiative might be defeated by our high real estate prices? “If there is any irony, it is that the vilification of Chinese immigrants with expensive homes is a discouragement for them to sink deeper roots into the community,” Woo says. “A very large percentage of our head office leads are coming from recently arrived immigrants from China who want to do more in B.C. than simply own a large house and enjoy the lifestyle. These individuals are in many respects our best sources of new business investment in the province, including head office investment.”
“I believe it’s a Canadian tendency to be conservative and not aggressively seek opportunity or change,” D’Avignon says. “However, the world doesn’t stand still and if we are to have a prosperous economy and maintain the quality of life for ourselves and our kids that we have come to enjoy in Canada, we need to embrace this global change and take advantage of it for our mutual benefit.”