Canada-China Trade: 2019 Year in Review
Tom Alton - 13 February 2020
Over the past few decades, Canada-China trade has expanded, creating a substantive economic relationship between the two countries. China became Canada’s second largest trading partner (behind the United States), although accounting for just 4% of Canadian merchandise exports and 12% of Canadian merchandise imports. 20 years ago, Canadian imports from China totaled roughly $11 billion. This number has since risen to $75 billion in 2019.
The current Canada-China trade relationship is, however, fraught with complications arising from high-level political tensions and associated trade restrictions. Huawei CFO Meng Wanzhou’s arrest and the subsequent detention of Canadians Michael Kovrig and Michael Spavor in China triggered a steep decline in the bilateral relationship. Canadian exporting industries found themselves caught in the crossfire - canola exports to China were halted in March and pork/ beef exports paused in June. Although the meat export market with China re-opened in November (canola remains in limbo), action taken by the Chinese side demonstrated a retaliatory willingness and ability to punish Canadian exporters to great effect.
While national media coverage of Canada-China trade concentrated largely on industry-specific export barriers, some provinces and industries quietly flourished. Even the value of pork/beef exports, after months of uncertainty, were higher (11% and 20% respectively) in 2019 when compared with 2018.
There is no nationally uniform sentiment towards China, even in the face of a yearlong diplomatic crisis. China trade optimism (and perhaps attitudes towards broader engagement with China) would likely differ between a canola farmer from Alberta and a lobster fisherman from Nova Scotia.
With a completed U.S.-China “Phase One” trade deal, ongoing extradition hearing, and coronavirus disruption, the road ahead for Canadian trade with China appears equally tumultuous. The CIUA’s Canada-China Trade: 2019 Year in Review is designed to both illustrate and contextualize the current Canada-China trade relationship in the wake of a chaotic year. It uses data from Statistics Canada for goods (merchandise) trade with China, presented on an unadjusted customs basis in Canadian dollars.