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Canadian Tech Companies and the China Marketplace

Publié: 20 décembre 2021
Rédigé par: Deanna Horton, Xinran (Eugenie) Lu

China and Hong Kong are the largest markets of interest in Asia for Canadian tech companies. Not surprisingly, Hong Kong is predominantly services-related. A study of Canadian tech firms in China has recently been completed in which no significant changes were found over the 2020-21 period in terms of market exits. This shows that the Chinese marketplace continues to play an important role for Canadian tech firms.

The research for this brief report focuses on 200 Canadian tech firms with 415 locations in China and Hong Kong. The graph below shows the locations of these firms by sector. Hong Kong is the largest destination, followed by Shanghai, and advanced manufacturing is the largest tech sector. However, services predominate overall, especially software and services and analytics, and this breakdown of locations and sectors has largely continued since 2015.

graphic of locations and techmap class

The graph below illustrates that small and medium enterprises (SMEs) dominate in most sectors.  

graphic of techmap class and firm size

Of further interest is whether the Canadian tech firms located in China and Hong Kong also have locations in other markets. The graph below shows that most firms have subsidiaries in either the rest of the Asia Pacific or other markets and are not solely based in China or Hong Kong.

graphic of techmap class and client market

Finally, in a separate study of Canadian digital multinationals (these companies are all services-related), we determined that the clients of these Canadian tech firms are overwhelmingly other services companies, as illustrated below.

client industry breakdown

In summary, we have drawn the following conclusions from the mapping data on Canadian tech companies with locations in China and Hong Kong:

  • China and Hong Kong continue to be the top destinations for Canadian tech firms in Asia, and there is no evidence of a major change in this trend in the 2020Q1–2021Q1 period;
  • Services-related companies have the largest share of locations in China and Hong Kong, in particular, in the two sectors of software and services and analytics;
  • SMEs dominate in most sectors, and these companies have locations in other markets, proving that companies in the digital economy do not have to be large to be globally competitive; and,
  • Evidence of global services value chains: The clients of services-related digital multinationals are overwhelmingly other services companies.

The research for this project is based on data from the Munk School’s CanAsiaFootprint mapping project https://munkschool.utoronto.ca/canasiafootprint/ which currently comprises 762 Canadian companies and organizations with 2,476 locations in Asia. Additional research was undertaken for the Creating Digital Opportunity (CDO) project at the Munk School, focusing on Canada in the global digital economy.

Deanna Horton

Deanna Horton est actuellement attachée de recherche supérieure à l’École Munk des affaires internationales et des politiques publiques de l’Université de Toronto, attachée de recherche mondiale au Centre Wilson à Washington, D. C., et attachée de recherche à l’Institut canadien des affaires mondiales. À l’École Munk, Mme Horton a entrepris des recherches portant sur l’emplacement d’entreprises canadiennes en Asie, en tirant parti de données réunies pour une carte interactive. Elle a également animé et modéré plusieurs exposés de conférenciers et tables rondes de discussion au sujet des relations du Canada et des États-Unis avec l’Asie.

Au cours de sa carrière diplomatique, Mme Horton a été ambassadrice du Canada en République socialiste du Vietnam, ministre (relations avec le Congrès, le public et divers gouvernements) à Washington, et a passé douze ans au Japon, période dont le point culminant a été sa nomination au poste de chef de mission adjoint. Elle a été négociatrice du premier accord de libre-échange nord-américain, puis a passé quatre ans à Washington pour suivre la législation du Congrès américain sur l’ALENA et l’OMC. Dans le secteur privé, Mme Horton a été vice-présidente (relations avec les investisseurs et affaires générales) chez Sherritt International, une société de ressources diversifiées.

Mme Horton est titulaire d’un diplôme d’études internationales du Centre de Bologne, de l’École des hautes études internationales de l’Université Johns Hopkins; d’une maîtrise (affaires internationales) de l’École des affaires internationales Norman Paterson de l’Université Carleton et d’un baccalauréat (avec distinction) de l’Université McGill. Mme Horton a également passé deux ans à l’Institut du service extérieur du département d’État des États-Unis à Yokohama, au Japon.

Dernier articles de Deanna Horton:

Strategic Reflections: APF Canada Analysis of Canada’s Indo-Pacific Strategy One Year After Implementation Seeking a New Way: Canada in the Post-Pandemic Era There Can Only be Losers in the Looming U.S.-China Trade War Read more >

Xinran (Eugenie) Lu

Eugenie Lu is a recent graduate of the Munk School of Global Affairs & Public Policy, University of Toronto.

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