Canada-China trade breaks record, as imports hit $100 billion
According to Statistics Canada data, trade between China and Canada will reach record levels in 2022, with imports surpassing $100 billion for the first time.
Economists and others say businesses are looking beyond political tensions between the two countries as demand soars and established supply chains reassert themselves in a post-pandemic world.
James Blunder, an economics professor at the University of British Columbia’s Souder School of Management, said companies would not prioritize politics without government policies such as those currently restricting trade with Russia.
“Of course there are tensions, but the economy, trade flows, and economic activity in general are less susceptible to political tensions without clear policies,” said Brander.
Canada imported a record $127.968 million worth of goods from China last year, up 16% from $86 billion in 2021, according to Statistics Canada data.
The largest import in 2022 will be consumer goods at $31 billion, followed by electronic and electrical equipment at $28 billion.
Canadian exports to China recovered from a slump in 2018 after the arrest of Chinese Huawei executive Meng Wanzhou and China’s detention of Canadians Michael Spever and Michael Kovrig, data show 279 reached a historic high of $100 million.
China lifted a three-year ban on Canadian canola last year after Meng was arrested after returning to China.
But tensions between Ottawa and Beijing remain high amid allegations of Chinese interference in Canadian elections and government confirmation of China’s surveillance activities.
Anastasia Ufimtseva, program manager at Canada’s Asia-Pacific Foundation, said economics and politics are “very intertwined” but it could take a long time for the two to come together.
In the meantime, companies will seek cost-effective solutions to comply with the dynamics of global trade, she said.
“In the future, we may observe changes in trade, which may taper off, but we still need to be careful about all the factors companies take into account when making decisions. “
Ufimtseva said it will not be easy for companies to find alternatives to China, the world’s second largest economy.
“Many countries say they want to establish alternative supply chain structures after the pandemic, but switching is expensive and difficult when businesses are established. We have suppliers. Find alternatives to build. It takes a very long time to get there, the infrastructure,” said Ufimtseva.
She said existing supply chains have stabilized after the pandemic’s upheaval.
University of Toronto economist Daniel Trefler says manufacturing supply chains are not easily mobile.
“Of course it’s very difficult to do,” said Trefler. “It’s not possible in a short period of two, three, four years.”
The Chinese consulate in Vancouver last week rejected a report in The Globe and Mail that allegedly tried to expel a candidate seen as unfriendly to Beijing. The consulate said the report “defamed and discredited” China.
Meanwhile, the Pentagon and the Canadian military confirmed last week that China is aware of recent surveillance operations in Canadian airspace and waters.
This report by the Canadian Press was first published on February 27, 2023.
This article was produced with financial support from the Meta and Canadian Press News Fellowship.