By Sumayya
OTTAWA – As Prime Minister Mark Carney gets ready for a journey to China and a two-sided meeting with Chinese President Xi Jinping next week, brand-new commerce numbers show Canadian sales to China are hitting record-breaking levels, especially in Western Canada.
Third-quarter numbers put together by the [China Institute] at the [University of Alberta] show powerful growth in sales, topped by food and energy shipments.
“Our exports are going to hit record highs this year, and the numbers are accelerating,” stated Philippe Rheault, who works as the director of the China Institute. This trade jump shows a major turnaround from the lowest point in Canada-China relationships that followed the locking up of Canadians [Michael Kovrig] and [Michael Spavor] in China after the 2018 arrest of Huawei manager [Meng Wanzhou] in Vancouver. Trade between the two nations went up after a deal last January that saw Ottawa get lower Chinese taxes on Canadian products in exchange for letting Chinese electric cars enter the Canadian market.
Total two-way trade hit 36.78 billion dollars during the third quarter, which stands as the highest quarterly level in history, driven mostly by energy sales.
Crude oil sales to China shot up 159 percent, averaging 327,000 barrels every day. A lot of that growth is credited to extra space provided by the [Trans Mountain] pipeline.
“I think a lot of experts were predicting that most of the Canadian crude that made it to tidewater would actually end up going to California and not going to Asia. That’s been disproved emphatically, and it’s almost all going to East Asia, and the majority of that is going to China,” Rheault expressed.
Supply blockages in the Middle East also fed into higher oil prices for shipments going to both China and the United States.
Agriculture Exports See Increase
The numbers also point toward a softening of Chinese taxes on Canadian farming products.
Canola meal sales climbed up to 360.3 million dollars from 12.9 million dollars a year before. Pea shipments went up to 147.6 million dollars from 9.2 million dollars, while beef sales reached 181.4 million dollars after being basically at zero a year ago.
While a majority of provinces noted higher sales to China during the quarter, Alberta and Saskatchewan made up close to 78 percent of the total increase.
The report explains that national home-grown sales to China went up by about 4.32 billion dollars year-over-year, with Alberta’s jump driven mostly by crude oil shipments and Saskatchewan’s by canola meal, canola seed, potash, and peas.
A few China experts warned that lifting trade with China brings along dangers that Canadian producers understand very well.
“In 2024, nearly 70 per cent of our canola seed exports went to China, giving Beijing significant leverage that it has used during political disputes,” noted Vina Nadjibulla, the chief executive officer of the [Centre for Strategic Statecraft].
“We should expand trade with China while continuing to develop other markets. The goal should be to reduce strategic dependence, not simply shift it from one major power to another.” [1]
Rheault stated the numbers show the real power of Canada’s fresh relationship with China and a change in national government policy.
“I think some observers are still going to be surprised at how forward leaning the prime minister and his government are when it comes to engaging with China at a time when the United States may be reconsidering its approach to Canada,” Rheault shared.
Even with higher sales to China, Canada still ships out close to ten times as much merchandise to the United States.
Carney’s big target is to double the sales of Canadian products and services to non-U.S. marketplaces by the year 2035. Clearly, China will hold a massive part in that plan.
Carney takes off Wednesday for a fast-paced trip through Asia that includes visits to the ASEAN meeting in the Philippines, the APEC meeting in China—where he is expected to talk with Xi—and the Francophonie meeting in Cambodia.
The journey will mark Carney’s second official visit to China as prime minister and comes right as trade between the two nations hits never-before-seen levels.
