Cultural differences are core issues for investment in Canada

Cultural differences and business practices are the fundamental issues for Chinese investing in Canadian mining projects, said participants at a roundtable on Wednesday.

The Prospectors & Developers Association of Canada's (PDAC) held its annual conference here on March 3-6, bringing together delegates from over 125 countries and regions in one of the world's biggest events in the industry. Chinese and Canadian stakeholders took this opportunity to talk about ways to facilitate bilateral cooperation and overcome existing challenges.

They touched on several issues including China's macro demand for mining commodities, the effects of the European financial crisis and China's slowdown, but the topic that dominated the discussion mainly revolved around the cultural issues that often hinder Chinese investments.

In the current economic climate, many Canadian companies are desperate for Chinese investors to get on board on their projects right now, but both sides acknowledge that many problems often occur in the post-investment phase.

Most, like John Guo, the Chief Operating Officer of Jien Nunavik Mining Exploration, a Chinese-owned company with operations in Canada, agreed that the issues stem from a lack of cultural understanding of Canadian business practices.

"We have a lot of things to learn," said Guo. "The big challenge, I would say, (is) the experience and also the culture. How to integrate the Chinese way, or Chinese experience into Canadian regulations."

Having preconceived notions and expectations on a project without thorough research is a dangerous path for Chinese investors, he said. It's essential for potential investors to learn about Canada's lengthy permitting procedures, understand Canadian business practices and ultimately comply with regulations if they want to succeed.

"There's no shortcut and this is maybe one of the reasons the Chinese failed because they didn't expect such a procedure and they don't know how to proceed," said Guo.

IMPACT ON LOCAL ENVIRONMENT AND COMMUNITIES

It's important to know the rules of the game and fully comprehend all aspects of the project before investing, advised Guo. And that means understanding the full impact they will have on certain communities.

"They're usually selective to their due diligent. The only aspect (they're concerned with is) the technical part," he said. "But sometimes they just ignore for example the social aspect, the environment aspect, even the local community environmental impact."