Trade between China and Canada hit record levels in 2022, with imports breaking $100 billion for the first time, statistics from Canada show.
Economists and others say companies are looking beyond political tensions between the two countries, as demand increases and established supply chains recover in a post-pandemic world.
James Brander, an economics professor at the University of British Columbia’s Sauder School of Business, said that in the absence of government policies that dictate otherwise — such as those currently restricting trade with Russia — businesses would not prioritize politics.
“Obviously, yes, there are tensions. But economic flows or trade flows, and economic activity in general, are not affected very much by the political tensions unless there is an explicit policy,” Brander said.
Statistics Canada statistics show Canada imported a record $100,027,968,000 worth of goods from China last year, up 16 percent from $86 billion in 2021.
The largest category of imports in 2022 was consumer goods, at $31 billion, followed by electronic and electrical equipment, worth $28 billion.
The data show Canadian exports to China also hit an all-time high of $27.9 billion, recovering from a slump that followed the 2018 arrest of Chinese Huawei chief Meng Wanzhou and China’s detention of Canadians Michael Spavor and Michael Kovrig.
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China last year lifted a three-year ban on Canadian canola that had been imposed after the arrest of Meng, who has since returned to China.
But tensions between Ottawa and Beijing remain high amid allegations of Chinese interference in Canadian elections and the government’s confirmation of Chinese surveillance operations.
Anastasia Ufimtseva, a program director at the Asia Pacific Foundation of Canada, said that while economics and politics are “very intertwined,” it may take a long time for them to become aligned.
In the meantime, companies will follow global trade dynamics and seek cost-effective solutions, she said.
“Potentially in the future we may observe changes in trade, they may trickle down, but we still need to be careful about all the factors that companies take into account when making the decision.”
Ufimtseva said it is not easy for companies to find alternatives to China, the second largest economy in the world.
“Despite many countries saying that post-pandemic we want to establish an alternative supply chain structure, it is costly and difficult to change if your company was established, you have your suppliers. It will take so long to find alternatives to build that infrastructure , says Ufimtseva.
She said existing supply chains had stabilized after pandemic disruptions.
Daniel Trefler, an economist at the University of Toronto, said manufacturing chains cannot be moved easily.
“Obviously, it’s extremely difficult to do,” Trefler said. “It is impossible to do in a short period of two, three, four years.”
China’s consulate in Vancouver last week rejected a report in the Globe and Mail newspaper that described alleged attempts to oust candidates seen as unfriendly to Beijing. The consulate said the report “smeared and discredited” China.
The Department of Defense and the Canadian Armed Forces confirmed last week that they were aware of recent attempts by China to conduct surveillance operations in Canadian airspace and waters.
This report by The Canadian Press was first published on February 27, 2023.
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