China Brief: China’s relationship with Canada’s West
Issue 96 | July 2023

In this issue: China suffers major crop and agricultural damage,  Canadian exports to China surge, Taiwan lifts beef ban and more

China suffers major crop and agricultural damage

China, the world’s largest producer and consumer of wheat, has suffered a severe blow to its ag production with the worst weather disruption in a decade, harming wheat harvests and disrupting pig and fish farming according to a piece in the New York Times.  

Market sentiment remains largely unaffected by reports indicating potential quality issues in China, but this is a pretty big deal. According to the Western Producer, lost wheat in China may mean more demand for Canadian wheat. In 2022, 28 per cent of China’s wheat output was affected by heavy rainfall and flooded fields. This year, that percentage is even higher.  

China may need to augment its wheat imports which could drive-up global grain prices, according to analysts. Canada’s position as a top wheat supplier stands to benefit as China, already the largest buyer of Canadian wheat, is likely to import more due to the poor quality of its own crop. China is projected to surpass Egypt as the top wheat importer in 2022-23. 

Plus, South China Morning Post reports that the country’s grain output goals are at risk this autumn due to adverse weather conditions. 

China has been actively researching and cultivating heat-resistant varieties of rice, genetically modified soybeans, and innovative seed technologies to adapt to the increasingly volatile climate, says the New York Times. 

Ocean freight carriers are cutting sailings

In response to lower cargo demand this year, ocean carriers are implementing significant mid-year modifications to their trans-Pacific networks. From delayed and cancelled voyages to a reduced frequency and speed of sailings the new measures are likely to delay Canada’s recovery from the supply chain disruption caused by the Port of Vancouver strike. 

Canadian exports surge, reducing trade deficit with China in Q1 2023

Our friends over at the University of Alberta’s China Institute have released their Q1 2023 trade update and here’s what you should know:  

  • Canadian exports to China experienced a remarkable growth rate of 44.21 per cent year over year (YoY), surpassing the country’s overall YoY growth rate of 9.87 per cent in the first quarter of 2023.  
  • Bolstered by the reopening of the Chinese economy and heightened Lunar New Year demand, exports reached an impressive total value of CAD$8.36 billion.  
  • Notably, canola emerged as the leading export, boasting a YoY growth rate of 331.61 per cent and a value of $1.27 billion.  
  • Additional major export products included coal, chemical wood pulp (soda or sulphate), iron and copper. This robust growth in exports, coupled with a decrease in overall imports from China, contributed to a decrease in Canada’s trade deficit with China during the first quarter. 
  • To see trade with China by province, check out the full document here. 

In an interview with Real Agriculture, our Director Carlo Dade explains this surge in exports despite rising political tensions with just one word: ‘consumers.’  

“There’s a reality to the market, this reality of what people need and what people produce. And that seems to have a countervailing impact to the political issues and the security issues,” said Dade. 

Taiwan lifts beef ban

After a two-decade ordeal since the discovery of BSE affected Canada’s beef exports, Taiwan has now lifted its restrictions on Canadian beef from cattle over 30 months old, The Western Producer reports. The lift follows Japan’s recent termination of all barriers on Canadian beef, including processed products. Although certain products such as ground beef, internal organs, and specified risk materials remain ineligible for the Taiwanese market, the lifted restrictions present an opportunity for Canada to expand its trade capabilities, despite the relatively modest current value of Canadian beef exports to Taiwan at under $14 million.  

Still, the mainland Chinese market, valued at roughly $200 million by Canada’s beef farmers, remains closed to Canadian beef. 

Canadian corporate watchdog initiates probe into human rights violations in imports from China

Ottawa’s corporate-ethics watchdog is preparing to launch a series of investigations into Canadian imports from China, aiming to ascertain whether these products are being manufactured under conditions involving human rights violations, Global News reports. The move, which advocacy groups have been urging for years, signals a renewed commitment by Canadian authorities to address concerns related to the ethical sourcing of goods. Nike and Dynasty Gold are among some of the companies being probed.  

China ranks third in readiness for global clean energy transition, trailing Australia and Canada

According to a recent BloombergNEF study, China has secured the third position among 10 markets evaluated for their capacity to bolster the supply of crucial metals essential for the worldwide clean energy transition and the battle against climate change, South China Morning Post reports.  

In the assessment China achieved a score of 65 out of 100 in terms of its readiness to expand the production of vital minerals like lithium, copper and graphite. Australia claimed the top spot with a score of 92, followed by Canada at 73. Factors such as reserve abundance, talent availability, environmental impact assessment frameworks, sector strategy, and political stability were considered in the evaluation.  

CWF’s Indo-Pacific Monitor  

Canada and South Korea forge deals to strengthen ties on clean energy and reduce trade dependence on China

Prime Minister Justin Trudeau recently concluded discussions with South Korean President Yoon Suk Yeol, finalizing significant agreements on critical mineral supply chains and youth mobility. More on that here. Trudeau had an interesting quote about dealing with China: “We recognize — both of us — that China is an important economic partner, not just in the region but around the world…But we need to be clear-eyed about where we co-operate with China.” 

Space tech firm collaborates with Canada’s department of fisheries and oceans to combat illicit fishing in Indo-Pacific

In a move to combat illegal fishing activities, space technology company MDA has secured a two-year agreement with Canada’s Department of Fisheries and Oceans. The partnership aims to enhance surveillance efforts in the Indo-Pacific region, targeting suspected cases of unauthorized and unreported fishing. More on that here.  

Canadian navy continues to sail through the Indo-Pacific

Canadian Defense Minister Anita Anand declared that the Canadian military will continue to sail through the Indo-Pacific, adhering to international law. Anand underscored the Canadian navy’s commitment to navigate the South China Sea, East China Sea, and Taiwan Strait, emphasizing Canada’s dedication as a Pacific nation to collaborate with allies and partners. More on that here.  

South Korea’s national security strategy unveils expanded partnership opportunities for Canada

South Korea’s recently unveiled National Security Strategy (NSS) unveils a significant opportunity for Canada to bolster its role in global security and supply chain resilience. The strategy, released on June 7, highlights South Korea’s intention to enhance ties with strategic partners, including Canada, in areas such as security, trade and emerging technologies like artificial intelligence (AI) and electric vehicles. More on that here.  

 U.S. reports progress on IPEF

Some progress was reported during the fourth round of negotiations for the Indo-Pacific Economic Framework for Prosperity (IPEF) in Busan, South Korea. Participants are now aiming to reach agreements on trade, clean economy and fair economy issues by November of this year, ahead of the Asia-Pacific Economic Cooperation leaders’ summit to be hosted by the United States. This has been a slow-moving process and “while the supply chain deal has not been published, signed or ratified, IPEF members are looking to get a head start on aspects of implementation.” This says something about how difficult trade agreements can be in the U.S. 

Other News

  • An opinion piece about rising anti-China stances across the political spectrum in Ottawa recently came out of the South China Morning Post. Check it out here.  
  • China has introduced Free Trade Zone Opening-Up Measures, a comprehensive package of 33 initiatives focused on bolstering international trade and investment, according to the China Briefing. 
  • Chinese Canadians are paying tribute to the late singer Coco Lee (李玟) for her trailblazing efforts in advancing Asian representation in North American pop culture. More on that here.  

– 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.