Thank you for the opportunity to contribute to this important discussion.
Established in 1985 by the Asia-Pacific Foundation of Canada Act, the Asia Pacific Foundation of Canada's mandate promotes Canada's involvement in the region.
Today, as we urgently seek to diversify our export markets and our sources of supply for imports in a new era of geopolitical uncertainty, that mandate to promote engagement in Asia is surely more relevant than ever.
I know the committee has already heard from numerous witnesses that the Indo-Pacific region will be the leading source of economic growth in the world for decades to come. At APF Canada, we can supply lots of quantitative data about this growth story. There is rich material available at our website, which is asiapacific.ca.
Today I will focus my opening remarks on some qualitative aspects of the story. What makes this growth a really interesting opportunity is not so much its volume, but its nature. In an emerging market such as Vietnam, 2% of economic growth is very different from the same growth in a mature market such as the U.S.A. In mature markets, Canadian businesses seeking new customers typically have to wrestle away market share from established players with loyal customers. By contrast, every percentage point of growth in these big middle-income economies typically represents millions of households crossing an income threshold that sees them change their consumption habits.
Simply put, in these places, every year there are new households with money to spend on better education, health care, high-quality food and clothing, financial products and leisure experiences.
This is the core promise of growth in Asia for Canadians. It is the opportunity to compete in new markets for services and goods that consumers in large numbers every year are considering for the first time in their lives. Key to this consumption transformation is urbanization. By 2050, Asia's urban population will have grown from two billion to 3.3 billion. This brings not only a change in lifestyle; for these 1.3 billion new urban dwellers, most of the buildings they'll inhabit in 2050 have yet to be built, not to mention all of the new roads, shopping malls, schools and rapid transit systems they will use. All of this will need to meet ever-higher standards for reduced carbon footprint and energy efficiency, providing high value opportunities for innovative clean technologies and approaches, in which Canadians are competitive globally.
This transformation means significant opportunities in a range of areas including continued growth in our traditional commodity exports, and also growth in new areas, including higher quality agri-food and seafood products. It includes educational services, which is recruitment of more students to Canada from more places across Asia, as well as the provision of educational consulting and technology services in country in Asia. It includes clean technologies related to energy efficiency, the transition to sustainable energy systems, low-carbon construction, water management and other environmental priorities. It includes digital technologies and artificial intelligence applications in health care, finance, education, agriculture and food processing. It includes financial products for houses and saving for retirement, which is an area where Canadians are already well established in some parts of Asia through our insurance companies and asset managers and through the thought leadership of our pension funds as respected and sought-after long-term investment partners in Asia.
While there is great promise in all this, we should be under no illusions. There are fierce competitors everywhere, both international and local. There are risks of all kinds to be aware of. To be successful, we will need long-term focus, a sustained effort and investment of real resources.
In launching an Indo-Pacific strategy for Canada, the federal government needs to commit to at least three key areas of action. Number one is sustained engagement at the political leaders level with partners in Asia, with a special focus on broadening and deepening relationships with the emerging economies and middle powers of Southeast Asia. The launching of free trade negotiations with the Association of Southeast Asian Nations and Indonesia is a good start.
Number two is financial investment and regulatory support for the hard and soft infrastructure on which expanded trade depends. Pipelines are just one example. Another example is the port of Vancouver, a few kilometres from where I am now, which needs more physical capacity. It also needs zoning support for more industrial land for warehousing and logistics. That's something that requires political will in the national interest.
Number three is that new investments are needed in building the Asia knowledge and competency of Canadians from students right up through the senior ranks of our businesses, public institutions and governments. We need increased public support to equip our businesses to be alert to the risks as well as the opportunities through the trade commissioner service, Export Development Canada, Business Development Bank of Canada and the regional development agencies.
We've done detailed work in these areas at APF Canada. I'd be delighted to expand on any of them and to address other matters of interest to the committee.
Thank you for giving me the opportunity to speak to you today. I look forward to our discussion.