In this issue: The difficulty with diversification, China shifts tone and G7 makes moves, Retail Council of Canada weighs in on furniture tariffs 


The difficulty in diversification

China’s trade boom continues, with a 28 per cent growth in exports and 51.1 per cent growth in imports in May, as reported in this Bloomberg News article, although export growth was weaker than forecast. As a recent BIV article notes, Canada remains “tightly bound” to China, amid ongoing debate on diversification. For Canada, diversification is not as simple as the government snapping its fingers, as Canada West Foundation Trade Director Carlo Dade told BIV. “We are not a centrally planned economy. The private sector makes the decision on where to trade, not the government.” Hugh Stephens, distinguished fellow at the Asia Pacific Foundation of Canada and vice-chairman of the Canadian Committee on Pacific Economic Co-operation also noted “there’s not a huge amount of things government can do.” Both Dade and Stephens point to short- and long-term actions government could take to support diversification.

Kevin Carmichael makes the case in a Financial Post piece that food – not AI – is the new oil, and Canada does not do enough to leverage its comparative advantage. In terms of China, he says “[the country] controls about nine per cent of the world’s arable land, but has to feed about 20 per cent of the population. It is going to need some help and it might have to take seriously those countries responsible for an outsized share of the world’s nutrition.”

In Nova Scotia, Premier Iain Rankin appears ready to carry on attending missions to China according to this CBC report. Premier Rankin describes the province’s trade relationship with China as “critically important,” not just for the economy but for Nova Scotia’s well-being once restrictions on international travel are lifted. “That market is critically important for our economy here, for our overall well-being,” Rankin told reporters.

China shifts tone and G7 makes moves

In a story that drew attention from the BBC and others, Xinhua News Agency reports that President Xi encouraged the country’s diplomats to present an image of “a credible, loveable and respectable China.” For those in Western Canada who have felt the pressure in terms of trade sanctions from China, this could be a welcome shift. Xinhua News Agency also recently reported that China will follow WTO procedures regarding the Australian barley dispute.

However, a CBC article holds a hint of caution from China experts. Gordon Houlden, Director Emeritus, China Institute at the University of Alberta, said that the remarks constitute a “recalibration” but that “there’s no substantive improvement possible in Canada-China relations until the twin issues of Meng Wanzhou and [Michael Spavor and Michael Kovrig] have been dealt with.”

At the G7 meeting, US President Joe Biden unveiled the US-led counter to China’s Belt and Road Initiative using the Blue Dot Network. The SCMP takes a look at how the Network compares to the BRI here. The network is part of a broader G7 initiative to Build Back Better World (B3W) – read the White House fact sheet here and G7 leaders’ communique here. Prime Minister Trudeau, who signed on as a G7 leader, said that the group must “stand strong and united” when it comes to China. Whether or not the initiative takes off and what that means for Western Canada and China will be something to watch. It is a reminder for the west of the importance of trade infrastructure and the need to ensure that Canada has the assets and connections to remain competitive in a world where infrastructure investments to move goods are growing.

Retail Council of Canada weighs in on furniture tariffs

The Retail Council of Canada has submitted a formal appeal to the Canadian International Trade Tribunal regarding Canada Border Services Agency tariffs on Chinese and Vietnamese furniture over dumping concerns (see this brief on why the tariffs were enacted and this brief for impacts on Surrey retailers). Now more Western Canadian retailers have come forward in a recent Globe and Mail article with eye-popping stories of how their stores and customers have been affected. Dodd’s Furniture and Mattress in Victoria, B.C, had one sectional cost almost $25,000 in mid-May, up from $6,498 earlier that month. The tariffs have exacerbated pressures retailers already felt through the shipping container shortage and pandemic pressures. Retailers have asked for relief pending the Tribunal decision, which is expected in September.

Anti-Asian discrimination and concerns over China

A recent Angus Reid survey, in partnership with the University of British Columbia, of 631 Asian Canadians found that 58 per cent of those surveyed experienced discrimination over the past year; 28 per cent reported incidents happened all or most of the time. Those who experienced discrimination were more likely to be younger and have lower income. The issue of anti-Asian discrimination has been particularly problematic in Vancouver, which had the highest number of anti-Asian hate crimes in North America in 2020 – from the CBC report on the survey.

Three witnesses from Tibetan, Uyghur and Hong Kong pro-democracy groups recently spoke to the House of Commons special committee on Canada-China relations. They cautioned against conflating concern over Chinese actions towards minority and pro-democracy groups with anti-Asian discrimination. Read more on their thoughts in this CBC report.

In other news

  • Federal Minister of Immigration, Refugees and Citizenship Marco Mendicino announced two new paths to permanent residency for those from Hong Kong who are recent graduates or workers. UBC’s Vancouver and Okanagan campuses respectively saw a 66 per cent and 32 per cent increase from 2019 in 2020 undergraduate applications from Hong Kongers who are neither Canadian citizens nor permanent residents when streams were opened in November 2020.
  • As covered in a previous China Brief, farmers across the Prairies have anxiously awaited rainfall amid drought concerns and spring seeding. A “billion-dollar rainfall” fell across the prairies with 25 millimeters or more falling.
  • A herd of lost elephants have captured Chinese attention after they broke out of an elephant reserve in South China last year. Millions are watching the drone footage of the elephants each week and the story made it to the North American press this week with CNNMSNBC and others picking up the story.
  • An outbreak of COVID-19 at a port in Guandong Province in China might extend global shipping pressures into December and the holiday season. The outbreak has compounded previous strains due to COVID-19, shipping container shortages, and the Suez Canal blockage.

    – Stephany Laverty, policy analyst and Mehera Salah, intern policy analyst

    The China Brief is a compilation of stories and links related to China and its relationship with Canada’s West. The opinions expressed in the links are those of the articles’ authors and don’t necessarily reflect the views of the Canada West Foundation and our affiliates.