It's an excellent question, and something I've actually thought a lot about over the years.
Let's start with the facts. Canada's market share of the Chinese import market is only about 1.6%. Our exports may have actually fallen in 2006. China's imports are growing at 20% to 25% annually, so our market share is shrinking rather than going up. We had a little run-up as commodity prices went up, but we've suddenly hit a plateau and we're going down again.
We have to look at China as an investment-led market. You have to understand that for Canadian business to succeed in China, it's very unlikely that we're going to fabricate the majority of things here and ship them over in containers and have the Chinese consume them. That will flow, but increasingly we're going to have to think about China as a market into which we have to go as an investor first.
Doing that is not for everybody. It's highly risky. It means you have to form joint ventures. You have to find a local partner you can trust. You have to protect your technology and your intellectual property. The Chinese are getting better all the time in terms of managing intellectual property, but they're not there yet.
It really starts with the integrated trade concept, with understanding that it's a question of how you can fit China into your supply chain and how you fit into the Chinese supply chain. You almost have to think about it as a triangle.You mentioned the United States, and you're absolutely right that we have the risk of being displaced in the U.S. market by lower-cost Chinese goods. I think of a sector like auto parts, for example, which over the next five to ten years will definitely be at risk from standardized auto parts being manufactured in China.
At the same time, American business has found a way to go to China. Something like 55% of China's exports are actually coming from factories owned by foreigners, largely Americans.
So we're already plugging in, but it's not very transparent. We have to find a way to actually go further there and ensure that Canadian companies can go directly to the market. That goes directly to a place like my former employer, Export Development Canada.
EDC has had the power to help companies go abroad as investors for a long time now. I was actually an official at the Department of Finance in the early 1990s, when Parliament decided to give to EDC the power to support outward investment. However, there has been an unwillingness on the part of the government as a shareholder, and even the board, to see that particular role carried out.