Maybe I could start.
Furniture grew and has been very successful because it allowed furniture manufacturers to specialize. It allowed them to focus on better design, better engineering, better sales, better distribution systems, because they were operating in a larger market. This industry is facing some pretty big problems currently, largely because of the impact of the dollar, but I didn't know until very recently that Canadian furniture designers are second only to the Italians right now in international sales. Here's a totally new industry that has been generated around this, and it's a good example of where services and manufacturing work together. So you're exactly right.
China manufactures something like 70% of the world's air conditioners. We have a company in our membership that is manufacturing air conditioners for China. An economist would tell you that's nonsense, but, you know, economists tell you a lot of things.
One of the basic things you learn in microeconomics is that firms will enter a market until profits are driven to zero, or down to the return on capital. For any business, this is exactly the problem you want to avoid. In today's world, the global economy is a world of commoditization, unless you're very specialized, unless you're very fast, unless you're very focused on customers and customer service. So that's where we're going to excel, in that area. That's what the furniture guys did fifteen years ago, and that's what the textile companies that are doing well did.
The textile industry is not doing very well right now because we've eliminated the import quotas. Some companies are doing well. We could make that industry a lot more successful if we, for instance, continued to offer duty rebates on textiles coming into the country. For many companies, that's a very important issue, and it seems we're not doing anything in that area. We could do a lot more to make the textile industry, and the clothing industry, a lot more competitive in the country.
Again, going back to this issue about China, we can succeed but only to the extent that we are specialized, fast, and customized. The reason these guys are doing so well in the Chinese market is because they're not trying to compete head to head with China on the types of air conditioners the Chinese are manufacturing. They had a whole new area of Chinese customers and asked themselves, “What do they really need?” Well, they don't need big residential air conditioners because they don't fit in Chinese apartment buildings and they don't work because of brownouts, but what they do need is a small air conditioning system with a battery cell that allows the air conditioner to work even with brownouts.
They can't keep up with demand in the Shanghai market. They have a base in Calgary. They're expanding their operations both in Canada and in China. It's a good example of companies--and there are many Canadian companies doing this--that are growing in the Chinese market.
That's all I wanted to say.