The China Connection

As we enter the "Asian century," the U of A strategically positions itself as a nexus between China and the West

By Sarah Ligon • Photos by Larry Louie, '82 BSc

When Bob Kwauk, '91 MBA, '92 LLB, joined the Calgary law office of Blakes in 1996, China wasn't on his map - it wasn't even on his employer's map - but just two years later, he was tapped to open the firm's new Beijing branch. Chinese leader Deng Xiaoping's loosening of the economic reins that had kept Chinese businesses under state control for the past half-century meant that huge new markets were open to the West - for those who could navigate the labyrinthine avenues of Chinese bureaucracy and the uncharted waters of doing business under "socialism with Chinese characteristics."

"We were one of the last firms on the scene," remembers Kwauk. "A number of big Canadian firms were already in Hong Kong, Shanghai and Beijing." Nonetheless, in the past decade, Blakes' Beijing office, under Kwauk's direction, has made a name for itself facilitating transactions between the two countries that now number in the billions of dollars every year. "Each one of our oil sands transactions could be into the billions, and our transactions with mining companies - most of them are around the $100-million level," he says.

Much of Blakes' success in China is no doubt due to Kwauk's business acumen and his particular talents. Although a native of Vancouver, he is of Chinese descent and speaks fluent English, Man­darin, Cantonese and passable French he picked up during his years as a Mountie. But a large part of Blakes' success is the natural by-product of China's phenomenal growth over the past decade - of being in the right place at the right time.

"What's driven China's growth is its emphasis on education"
-Gordon Houlden

Kwauk's time in China has coincided with the fastest economic growth in that country's 5,000-year history. In fact, it has been the fastest growth of any country, at any time, in all of recorded history. Since 1998, when he arrived, China has posted double-digit growth every year, meaning essentially that its economy doubles in size every six or seven years. And in a country of 1.3 billion people, the absolute size of that growth is just astronomical.

"When I arrived in 1998, there were 800,000 cars in Beijing," he says. "Today there are 4.5 million. For quite a few months in Beijing this past year, they were issuing 10,000 new license plates a week. Can you imagine?

"Of course, the numbers - the GDP growth and increases in consumption, the number of cars - don't tell the whole story," Kwauk continues. "What's even more interesting are the qualitatives. In talking with my colleagues - lawyers, businessmen, politicians, people who read the papers and who have a pretty good idea what's going on in China - still, when they visit for the first time, everything they see exceeds their expectations."

His own sojourn in China long ago exceeded his initial expectations. "I was only supposed to go there to set things up. It was supposed to be a two- to three-year posting, but I just stayed. It was too fascinating."

Go East, Young Man

During the past two decades, many alumni, like Bob Kwauk, have watched China's meteoric rise and answered its siren's call to "Look East." Around the same time that Kwauk moved to Beijing, Bernie Mah, '75 BCom, accepted an offer from Business School classmate Peter Lau, '75 BCom, to move to Hong Kong and help him grow a retail clothing chain. Now Giordano Inter­national Ltd., is one of Asia's most successful retailers, selling fashionable leisure wear at more than 2,100 outlets in 30 locations around the world.

Likewise, Da Li, '98 BCom, hoped to catch China on its ascent. In 2004, the Edmonton-raised Li opened a software company in Beijing that specializes in document management technology. "When we started, the whole market was completely new. We were the only supplier in China," says Li. "Now the market is thriving and we literally cannot keep up with client demand."

The University of Alberta also saw the opportunities earlier than most institutions, and, through its research and teaching, student and alumni connections, has positioned itself as a major nexus in Canada between China and the West.

At the centre of that nexus stands the U of A's China Institute, an institute unique in Canada that leverages the Uni­versity's expertise in Chinese affairs to create important teaching and research initiatives between the two countries.

The Institute was the brain-child of former university President Rod Fraser, '61 BA, '63 MA, '05 LLD (Honorary), who, on his visits to China in the 1990s, began to see the opportunities of establishing connections in China - and the perils of any university that aspired to world-class status if it failed to do so.

Every year, the Institute supports students and faculty study trips to China, as well as individual research collaborations with Chinese universities and China-related community events to the tune of more than $600,000. It holds annual conferences on Chinese relations and investment, energy and economic policy. And in August, it helped the U of A play host to a meeting of top Canadian and Chinese universities.

"What's helped drive China's growth is its emphasis on education, which is why it's so attractive to a university to have connections with China," says Gordon Houlden, director of the China Institute. Although Chinese universities were shut down and virtually destroyed during the Cultural Revolution, they are now thriving, says Houlden, but most "are still in the early stages of their development."

For now, many top Chinese students still see a degree from a Western univer­sity as an important stepping stone on the path to a successful career, and universities, in turn, see these students as very attractive candidates. Some 200,000 Chinese nationals will study abroad each year, and in addition to being the cream-of-the-crop academically, they also pay tuitions that are several times higher than their Canadian counterparts. In 2008, these students poured $1.3 billion into the Canadian economy, making education Canada's largest export sector to

China that year, according to a report from the Department of Foreign Affairs and International Trade.

The U of A has been particularly successful in its efforts to attract student talent from China, says Houlden. "The U of A has more Chinese nationals in its ranks of graduate students than any other Canadian university and is also receiving more of the prestigious - and fully-funded - graduate students sponsored by the China Scholarship Council than any other Canadian university." Last year, there were 1,366 Chinese nationals enrolled in the U of A's undergraduate programs, and 691 enrolled in graduate-level programs.

"Chinese students are a tremendous asset to universities like the U of A"
-U of A President Indira Samarasekera

Gongpu Wong, a graduate student in electrical and computer engineering, is one of 31 doctoral students currently being sponsored by the China Scholar­ship Council to earn a degree at the U of A. Although the scholarship requires him to return to China and teach at his home institution - the Beijing School of Posts and Telecommu­nications - after he receives his PhD, he considers receiving his degree from the U of A to be his "life honour."

"Chinese students are a tremendous asset to universities like the U of A," says U of A President Indira Samarasekera. "These talented young people bring with them new skills and perspectives that broaden the experiences and understanding of the Canadian students they study with. Their presence on our Canadian campuses is a critical part of our effort to become internationalized, global universities."

Although some students will stay and build lives in the West, many, like Wong, will return to China, further strengthening the U of A's connections there. "Youthful impressions tend to be very deep," says Houlden. "Chinese students who have studied in Canada and then returned to China include both the current Chinese ambas­sador to Canada and his predecessor. In the future, many very important discoveries will be made on Chinese campuses, and it is in our own interest to stay in touch with those scholars and to develop strong networks with them."

Research Connections

Today there are 82 formal agreements between the U of A and partner institutions across China, supporting innumerable individual research collaborations. As is common in our increasingly globalized world, these connections extend not just to other educational institutions but to governments and businesses as well, creating relationships that benefit everyone involved.

A typical collaboration is that of Pro­fessor Zhiquan Wang in the Department of Agricultural, Life and Environmental Sciences. Wang has partnered with industry and with researchers at Sichuan Agricultural University (SAU) to analyze the genome for beef cattle in the hopes of identifying traits that lead to improved growth rates and feed-efficiency. In the process, the U of A is helping SAU bring its genome analysis up to snuff with the rest of the world - an important milestone for China, as its people will demand more and more beef as they rise up the ranks to the middle class.

Family Dinner, 2008. China outpaced Japan as the world's second-largest economy in August. Along the way, "[h]undreds of millions of Chinese have been lifted from absolute poverty," says Gordon Houlden, director of the China Institute. However, 106 million rural Chinese, such as this family in Guizhou province, are still living below the poverty line of $1 (US) per day. Research conducted at the U of A-in collaboration with Chinese institutions-is working to reduce rural poverty.

Similarly, SAU is providing the U of A with much-needed manpower for the raw processing of the massive genotyping data. The relationship has also established a breeding ground, of sorts, for Wang, who hopes to recruit top PhD candidates to the U of A from among SAU's ranks. Wang wants to start up a similar research project at the U of A related to swine, and SAU already has one of the major swine research groups in China.

One of the most successful collaborations between researchers at the U of A and in China is also one of the most interconnected. Larry Wang, a professor emeritus in the Department of Biology, has drawn together collaborators from the U of A, several Chinese universities, the Chinese government and one very important private investor - childhood friend Sam Chao, who donated his life savings toward the effort - to form the U of A-based ECO Fund, whose goal is the reclamation of China's famed Yangtze River.

Flowing across the entire country, from the Tibetan Plateau to the Pacific Ocean, the Yangtze River is the economic lifeblood of tens of millions of Chinese people; however, it has become severely polluted through years of environmental and agricultural mismanagement. Since 2000, Wang has organized more than a dozen pilot projects, mainly in the western province of Yunnan, that have encouraged area farmers to switch from crops such as corn, which erode the soil, to more environmentally sustainable - and economically profitable - crops such as mulberry, walnut, bamboo and pear.

The results have been astounding. Not only did the new crops earn the farmers up to 12 times their previous incomes - inducing all of their neighbours to jump on the bandwagon - they have also noticeably improved the water quality along the river.

The benefits for China and the farmers along the Yangtze are obvious, fulfilling the vision of the University's founding president Henry Marshall Tory, '28 LLD (Honorary) that the U of A's promise be "the uplifting of the whole people." But collaborations such as these have also led to very tangible benefits to Alberta and the U of A.

By far the biggest benefit to the U of A - and to Alberta - from such close connections to China has been through the establishment of the new Li Ka Shing Institute of Virology. Announced last April, the Li Ka Shing Institute will provide a state-of-the art home for world-class researchers in their quest to rid the world of virus-based infectious diseases. The establishment of the Institute was the result of a $28-million gift to the U of A - the biggest single cash gift in the University's history - from a philanthropic foundation established by Li Ka-shing, a successful Chinese businessman. (The provincial government will contribute another $52.5 million.) None of this would have been possible without the groundwork of connections that have been established between the U of A and China over the past 30 years.

"China is an important partner for the University of Alberta," says Samarasekera. "We have more than 30 years of close collaboration with the Chinese government, corporations and institutions. The U of A is renowned in China for its innovative research and breakthrough discoveries as well as its excellence in educational programs. The strong connections between the U of A and China have laid the foundation for the creation of projects like the Li Ka Shing Institute in Virology."

How we're Connected

The University of Alberta has just over 2,000 Chinese nationals attending both graduate and undergraduate programs, and more than 1,400 alumni living in mainland China, Hong Kong, and Taiwan. It also has several exchange programs, research collaborations and more than 80 agreements with institutions across China. Here are just a few of the Univerisity's many connections to this complex country.

View The China Connection - How we're Connected in a larger map

China: 2020

Any university that aims to be among the top 20 public educational institutions in the world by 2020 can hardly ignore the fastest-growing economy in the world, or a nation of 20 million university students (and growing). That is why the Univer­sity has named China as one of its "areas of strategic importance" - locales where the University will concentrate its efforts and resources to develop major initiatives.

"China is important because it constitutes one of the great world civilizations that is regaining its long-held position as one of the leading cultural, economic and political actors on the global stage," says Houlden, who came to the China Institute after 32 years in the foreign service, most of them spent on China-related issues. "What we're seeing is the emergence of this as the Asian century, and, for China, equal power with the United States is something that is achievable in the first half of this century." However, knowing what sort of changes and challenges China's growth will bring - and how the U of A can best prepare for them - can be hard to predict, even for the experts.

"What we're seeing is the emergence of this as the Asian century, and, for China, equal power with the United States is something that is achievable in the first half of this century."
-Gordon Houlden

This past July, the China Institute hosted a conference titled, "China 2020," which brought scholars from all over the world to the University of Alberta to discuss and analyze China's possible paths of development and its growing influence on the world stage in the coming decade. Several of the topics that were hotly debated included China's influence in the energy and agricultural sectors, areas where the U of A - and Alberta - have already staked major claims.

"Hundreds of millions of Chinese nationals are beginning to enter the middle class and want to live according to that standard," says Houlden - a standard, he says, that includes an improved diet, rich in protein, which millions of Chinese currently lack. "This makes for extremely good news for our agricultural industry in Western Canada." And good news, too, for Zhiquan Wang and his genetic research on beef and swine.

But the implications are even larger in terms of China's influence in Alberta's energy sector. After initial reticence, Canada is now opening up its oil industry to Chinese investment. In the past year alone, China's state-owned oil companies have made a string of moves that have invested some $8 billion in Alberta's oil sands assets - some of those deals handled by none other than the Beijing office of Blakes and Bob Kwauk.

But the potential for future Chinese investment in the Alberta oil sands is even larger. "Given the investment resources that China can bring to bear, Chinese investment could potentially double and redouble in Alberta in the space of 10 years," says Houlden. After all, China has a growing middle class of aspiring drivers who'll need to fill up at the pump. Remember those 10,000 new license plates Beijing was issuing every week?

These are not just pie-in-the-sky predictions. If history is any guide, they will fall short of reality. "I'm convinced that if you asked scholars of China some 30 years ago about the range of China's potential outcomes in 2010, most predictions would have fallen far short in terms of China's actual openness and economic development," says Houlden. "Hundreds of millions of Chinese have been lifted from absolute poverty. There will be collisions on individual issues with China... but we should strive for the best possible outcomes. Whatever the course that China follows, it will have a very real impact on all of the world, so we have to have a stake in this enterprise.

"My suggestion to Albertans is this: pay attention to China. It will change your life and that of your children in ways that we can only dimly understand now."