China Brief: China’s relationship with Canada’s West
Issue 90 | January 18, 2023

In this issue: An update for Canadian farmers, China’s first population drop in 60 years, Canada’s tourism sector prepares as China reopens and more…

An update for western Canadian farmers, producers and exporters

Although the Canadian agri-food sector faced many challenges in 2022 due to supply shortages and foreign export market obstacles, exports to China prevailed and the sector is entering the new year strong.  

S&P Global Commodity Insights, a market analysis agency, reports that Canada has entered 2023 as a major global supplier of canola following both political and weather woes in competing foreign markets like Ukraine, Argentina and the U.S.  

And since we haven’t covered canola in a while, China ended 2022 with a Canadian canola shopping spree, purchasing 377 per cent more oilseed in the final months of the year than the previous nine months, The Western Producer reports. 

How much canola seed or oil Canada is able to export to China is in question as the North American market for renewable diesel is expanding. Manitoba Cooperator reports, that Canada could play a massive part supplying canola for this growing market. Chris Vervaet, Executive Director at the Canadian Oilseeds Processors Association, told Canola Week attendees that Canada could see a six million tonne increase in output capacity based new crush facilities in Canada. Imperial Oil is building a renewable diesel refinery near Edmonton, as are Federated Cooperative Ltd. in Regina, Tidewater Renewables in Prince George, Parkland Corporation in Burnaby and Covenant Energy in Saskatchewan. For more on how canola can fuel other budding markets, see this Alberta Farmer Express piece.  

While China may have dropped the three-year ban on Canadian canola last May, a ban that cost the industry between $1.54 billion and $2.35 billion in lost sales between March 2019 and August 2020, it still has an import restriction on Canadian beef with no indication if or when it may be lifted, Western Standard News reports.  

Alberta Farmer Express reports that Canadian wheat sales to China, Japan and Indonesia have spiked and are expected to trend upward as the year progresses. We may also see increased exports to South America since Argentina’s output remains compromised, according to the S&P end-of-year report highlighted in the same Alberta Farmer article.  

China’s first population drop in 60 years

Hitting the headlines hard, annual data out of China this week shows the population last decreased during the 1961 great famine, CNN Business reports. The Globe and Mail’s Doug Saunders shares a key perspective hiding behind the frenzied headlines: China isn’t worried about fewer bodies; they are worried about the likelihood of escaping the “middle-income trap.”  

As a result, we can expect China to accelerate investments in technological innovation, efficiency and productivity and shift away from low-wage, labour-intensive industries.  

Canada’s tourism sector prepares as China reopens

After three long years of closed borders and mass COVID-19 lockdowns China has finally reopened and the implications are global. Tourists and homecomings in China are expected to skyrocket, but other countries with large Chinese populations are expecting massive waves of visitors as well and Canada is on that list. Trip.com Group data shows that outbound bookings spiked 254 per cent following the border opening announcement in later December. The border officially opened January 8, 2023.  

In 2019, Chinese tourists were the second largest international market in B.C., Penticton Western News reports. While flights from China to Canada are still scarce, B.C. expects and hopes that Chinese tourism can get back to pre-pandemic levels as we head into Chinese New Year. Read this CBC article about the effectiveness of Canada’s negative-COVID test requirement and how the incoming influx of Chinese visitors could impact Canada from a pandemic perspective.  

Question is – is Western Canada ready for increased tourism? Staffing problems in the service industry continue. Good luck finding dinner in Fernie, B.C., or Lake Lousie, AB at the height of ski season . . . we tried and it was not pretty. And we will try to not trigger you too much if you were one of many impacted by the airport chaos last month, but airports are another industry vulnerable to the impending influx.  

Plus, read this South China Morning Post piece about how China’s reopening is actually great news for the global economy. And this cover story by the Economist has China’s reopening as the biggest global economic event of the year.  

Do rocky U.S.-China relations mean rocky Canada-China relations?

With a new U.S. congress roster and increasingly prickly U.S.-China relations, how the year ahead plays out is up in the air. Here are some thoughts.  

On Taiwan. Before Nancy Pelosi visited Taiwan in August, creating a spike in U.S.- China tensions, current U.S. speaker Rep. Kevin McCarthy alluded to his intention to visit Taiwan should he become speaker, Inside Trade notes. It will be interesting to see how he plays that card.  

Also on Taiwan, in our last brief we covered the World Trade Organization dispute brought on by China accusing the U.S. of violating WTO rules with  tariffs on steel and aluminum. Now Taiwan has added its voice to the complaint. 

Inside Trade quotes a senior United States Trade Representative (USTR) official making the case that joining a complaint does not necessarily mean siding with the country bringing the complaint and that Taiwan actually backs the U.S. Taiwan officials have clarified that they joined to be part of the proceedings and to keep tabs on what is being debated, a statement that’s not unusual for WTO disputes and especially for a country also negotiating trade agreements with the U.S. 

And a little something for our history buffs: the complaint against the U.S. mirrors Canada’s situation in 2014 when Taiwan launched a WTO complaint against Canada on welded steel. China, the EU, the U.S. and Brazil joined the complaint shortly after the launch. 

Meanwhile, U.S. trade talks with Taiwan are advancing with USTR officials saying that an early harvest deal is possible with Taiwan according to Inside Trade. 

Tech is also a pawn in the game of China-U.S. relations. South China Morning Post reports that U.S.- based Dell plans to remove all “made-in-China” chips from its products by 2024. Plus, Apple is looking to relocate MacBook production from China to Vietnam as early as May 2023, the same article says.  

How far is Canada willing to align with the U.S.? And how will Canada balance relations with these two increasingly separate nations? Stay tuned as we continue to follow the issue.  

CWF’s Belt and Road, Five-Year Plan and Indo-Pacific Monitor

As Canada and other countries look to implement Indo-Pacific Strategies, this section will also track developments in the region that are relevant to Western Canada.  

Canada won’t join US IPEF soon

Deputy U.S. Trade Representative said last week that Canada’s inclusion is “something [they’re] going to start talking about with [their] partner countries,” Inside Trade reports. She also notes the U.S. is “really heartened that other people think this is a meaningful agreement and are interested in it, but this is something that all 14 of [countries] have to figure out what a process might look like and that’s something we’re really just in the very beginning stages of even discussing.” 

China, Canada cozy up to the Philippines

China and the Philippines recently documented their agreement on comprehensive strategic cooperation in areas ranging from agriculture to infrastructure to Belt and Road cooperation and more, NewsWire reports.  

As Canada works to turn intentions into action following the release of the Indo-Pacific Strategy, talks with the Philippines have been reactivated. An official briefing out of the embassy in Manila shows that conversations have focused on defense cooperation between the two countries, Inquirer.net reports. The same briefing also mentions Canada’s efforts to strengthen the country’s cybersecurity system.  

West welcomes new South Korea strategy

Seoul released its “Strategy for a Free, Peaceful, and Prosperous Indo-Pacific Region.” Canada, the U.S. and Australia welcome it, Radio Free Asia reports. The same article highlights that Foreign Minister Joly believes that the strategies of Canada and South Korea are “aligned, complementary, and will drive forward shared priorities.” 

BRI developments in Pakistan take a turn

A port town in Pakistan, Gwadar, is under curfew following a local uprising against China’s Belt and Road presence in the region, Nikkei Asia reports. For more about the ongoing situation in Pakistan, read this past brief. 

Continued expansion

Despite the chaos in Pakistan, China has now signed BRI cooperation agreements with all five Central Asian countries (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan), Silk Road Briefing reports.  

The same article highlights some BRI progress in 2022. To note a few: the completion of China-Europe freight trains, the new International Land-Sea Trade Corridor (ILSTC), China-Laos railway and more.  

In a recent news briefing, China’s Ministry of Foreign Affairs said that the BRI “will continue to follow the principle of extensive consultation, joint contribution and shared benefits, work with all parties for common development, and make the BRI a bond that benefits the whole world.”  

Other news

  • Calling all foodies! A five-part docuseries that explores the merging of Chinese identity and Western Canada through food is now available to stream online. Read more about it here. 
  • Former New Brunswick education minister cuts ties with China’s Confucius Institutes on his way out of office. More on that here.   
  • Manitoba will celebrate the Lunar New Year at the Manitoba Chinese Business Gala this coming weekend where they will recognize entrepreneurs and businesses in the Chinese-Manitoban community, CBC reports.  

– Taylor Blaisdell, 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.