Asia-Pacific Report: Chinese investment could make Terrace, B.C. a hub
VANCOUVER SUN MARCH 27, 2016
What seemed like a simple sale of industrial land in Terrace in July 2014 (although a substantial one, comprising 480 hectares in total, and valued at $11.8 million) has the potential to be so much more.
Despite a lack of news since the purchase by Taisheng International Investment Services of the property at Terrace’s Skeena Industrial Development Park, officials of the Burnaby-based company said last week that environmental studies and site planning are well underway for their planned development.
What makes the project stand out is Taisheng itself. It is the local subsidiary of China’s Qinhuangdao Economic Development Zone, one of the country’s oldest special market areas founded in 1984 east of Beijing. As such, Taisheng represents companies that were at the forefront of China’s modern-day economic rise.
Richard Zhang, Taisheng’s managing director, said the vision for the Terrace industrial park is to create services not only for Chinese companies to set up manufacturing operations in B.C., but also for B.C. companies to leverage Terrace’s strategic location to reach a global market.
“I think the location offers a very interesting opportunity for local investors to access international demand,” said Zhang, adding that the creation of such an enterprise could also potentially lessen the impact of new Chinese-Canadians on residential real estate by encouraging investments in industrial and commercial sectors instead.
“New immigrants who I’ve met don’t want to just put their family here and fly back-and-forth between here and China to do business,” he said. “They do that now because they want to move some of their businesses here. But they don’t know what to invest in, and maybe that’s why they look at real estate. This industrial park may provide another focus for their investment.”
Zhang noted Taisheng started looking for a site to build an industrial park five years ago, eventually settling on B.C. due to a combination of the local tax structure, its economic and political stability, and openness to foreign business. The original plan was to find property in the Lower Mainland, but the exorbitant prices and the lack of large parcel of heavy industrial land forced Taisheng to look at more rural areas.
Terrace, with its proximity to port facilities at Prince Rupert, Kitimat and Stewart, is one of the closest locations in North American to Asia in terms of shipping distances. Zhang also noted the proximity of the nearby mining industry, as well as Skeena’s easy access to the Terrace Airport and local highways and railways as a “complete package” for Asian investors.
“At Qinhuangdao, most of the products are shipped abroad, and a lot of the materials we need to produce things also come from abroad,” Zhang said. “Our objective was, if our markets are abroad, then we have to think about going abroad. … And (Terrace) is a long-term commitment, which means we need the local community to see what our vision is, in order to build trust. We have to show we are serious, and this is not something happening at random.”
The relationship has also moved beyond the financial. Terrace officials have visited Qinhuangdao since the deal, and reached a “friendly exchange agreement” — promising increased exchanges in education, science, culture and sports — last December.
Danielle Myles, the economic development manager for the City of Terrace, said the town has hosted a number of delegations from Asia in the last few years.
“Many of them seem to be very keen on investing in the northwest,” Myles said, adding that Terrace tries to highlight its affordable land and strategic location.
“The story here is that this allows us to diversify our economy,” she added, noting the region’s traditional reliance on forestry and mining. Taisheng’s early plans will include an alfalfa-protein extraction company and a vehicle wheel hub manufacturer at Skeena.
Myles added that in anticipation of LNG development in the region, the province has been pushing a number of skilled-labour initiatives, meaning that workers will be available to fill the needs of the industrial park.
“I think once actual construction (at the park) starts, we’ll see much more interest in our region,” she said. “The town has been hard hit by the closure of local pulp mills, and to have the potential of a value-added industry here is great. We’re now really trying to get the word out about Terrace, and with Taisheng setting up, we think we’ll draw in quite a bit of investment to the region.”
Taisheng officials have not announced a timeframe for construction, although design of the site is expected to be completed by the end of the year.
The Qinhuangdao Economic Development Zone is located 280 kilometres east of Beijing. As many as 200,000 people live in the district.