Thank you very much.
Mr. Chair, vice-chairs, committee members, I'm Graham Shantz, president of the Canada China Business Council, or CCBC.
This year is our 40th anniversary as a national non-profit organization that's been dedicated to doing more and better business for our 350-plus members with China. Our members represent all sectors of the Canadian economy from coast to coast to coast. We have six offices today, four in Canada and two in China. We've just announced that we're going to open a fifth office in Canada—in Halifax, Nova Scotia, Mr. Chair—which will give us an ability to do what we've done for a long time, which is to support Canadian companies in their China strategies. Those offices largely support SMEs.
Since we started in 1978, China's economic reforms have driven China's rapid growth. Our larger members have obviously benefited from that growth. On the export side, think of China's emergence as a major, or “the” major importer for Canadian exporters of pulp, coal, grains and oilseeds. Our large insurance and banking members have established a substantial presence in China. Our pension fund members have been expanding their investments and their China footprints. One last very important point is that our large members from our beginning 40 years ago have viewed membership in the Canada China Business Council in part as a public good to assist other Canadians companies, SMEs in particular, to figure out how to do business with China.
Recently China's rapid economic growth has led to a fundamental change in what it's meant for Canadian companies—specifically, the emergence of China's new elite wealthy. These are the new consumers who've discovered our east coast seafood, who are touring Quebec, who've invested in our Ontario and B.C. wine industries, and whose children study in Alberta's universities and colleges. There are Chinese private equity firms that are taking stakes in small start-ups in my hometown of Waterloo, Ontario, in the IT sector. Chinese tourists are visiting Canada's north.
I should also emphasize that our membership is about 70% SMEs. About 20% of our total membership is made up of educational institutions here in Canada. A significant number of our SMEs are also tourism-related. I believe this point is fundamental for your work as a committee. We often talk about exports, but the impact of China's growth for Canadian SMEs is fundamentally a domestic story as well in the area of education, and tourism in particular. There are some things that can be done to make sure that, on the tourism side specifically, Canadian SMEs are ready to take advantage of the world's largest outbound tourism market, which is the Chinese market. My understanding is that tourism represents roughly 2% of Canada's GDP. When I was in government, serving as our ambassador in Spain, it was 9% of GDP in Spain.
My point there is twofold. One, we can do better in terms of tapping into the China market, which is the largest outbound market, in support of our SMEs. The other thing is that we should be targeted in what we do to help Canadian SMEs benefit from tourism in general, and obviously with this role from the China side in particular.
On the more classic issue of SMEs in China, every couple of years we poll our 350 members. The vast majority of those members, as I mentioned, are SMEs. I'll highlight briefly what their experiences are in China and what they're looking for in terms of support.
The membership has consistently identified several high-priority issues for their China businesses. Finding a reliable local partner is a challenge, one of the keys to success and one of their major challenges in trying to get into the China market. The SMEs have noted that staying current with national and local regulations in China is fundamental to their success. In addition, understanding the different business culture, and the culture in general, is critical. There's been a lot of media attention put onto intellectual property protection. Without understating those challenges, it's worth noting that IP protection has fallen lower on the list of challenges for our membership broadly and the SMEs as well.
In these opening remarks, I'd also like to highlight what the CCBC is doing to help our SME members. We operate two incubation centres, as we call them, one in our Beijing office and one in our Shanghai office. We've rolled out SME training coast to coast in each of the last two years. This is in five cities in Canada. We're developing, internally, training modules for SMEs, which will cover a whole range of issues to try to address what SMEs' concerns are with respect to establishing in China.
The China market is hyper-competitive and it's cost sensitive. We're doing work in China through our two offices there promoting Canada as a destination for investment in secondary and tertiary cities in China.
Should committee members want to explore any of those topics I'm happy to do so in the Q and A section.
Finally, to the committee, on November 12 our board recently launched an initiative to look at what we as a business council can do to assist Canadian SMEs that are owned and run by women, first nations or young Canadian entrepreneurs in their China-related efforts. We're in the consultation phase of that effort and any views that you have or the work of your committee will be quite interesting to us as you continue with your work.
Thank you.