IN THIS EDITION: Food security pushes China to open up, barley and canola strong, return of the great grain robbery
Food security pushes China to open up
China has taken steps to increase food imports to address food shortage concerns. China amended its List of Countries/Regions Permitted to Export Grains and Raw Plant-based Fodder to China. Since 2019, the changes have increased the number of tubers to three, including potatoes that only the United States is permitted to export, and sweet potatoes that only Laos is permitted to export. In terms of products Canada is permitted to export to China, some new competitors were added. Benin and Tanzania can now export soybeans, Lithuania can export wheat, while Russia and the United States can export barley.
China has also increased permissions for genetically modified products. The increase suggests China will allow commercial growth of GM products in the future, a move the country has resisted. The domestically developed products include a modified soybean, which is glufosate and glufosinate resistant, and a modified corn, which is resistant to the fall army worm pest. Internationally, China has approved Bayer’s Corp Science MON87411 and Syngenta’s MON87411 corn varieties for import, which are glyphosate-resistant and insect-resistant.
Barley and canola still going strong, Australia finds new market
Canadian barley is still performing well as China’s restrictions – including the 85 per cent tariffs – on Australia barley remain. The last barley survey showed Canada was at 10.7 million mt compared to 10.4 million mt in 2019. Exports are predicted to reach 3.5 million mt, over 2.3 million mt from 2020. However, China could have further demand if Australian tariffs continue.
Despite tensions with China over Canadian canola, demand will soon out pace supply with futures at $15 per bushel. The European Union leads international demand followed by China and Japan, respectively.
Australia has reopened its malt barley exports to Saudi Arabia and, for the first time ever, Mexico. The Mexico deal came from CBH Group, which was subject to a Chinese ban over alleged complaints of too much weed seeds, with the first shipment at 35,000 tonnes. It is believed to be the first shipment ever of malt barley from Australia to Mexico.
The great grain robbery: China edition
Grain sales from the U.S. to China are up but, according to an article in Reuters, observers question whether the Americans are repeating, or more correctly, replicating mistakes made in massive grain sales to Russia in 1972 – what has come to be called “the great grain robbery.” The concern is that, as in 1972 with the Soviet Union, the U.S. underestimates the failure of domestic agricultural production in China and resulting global impact. As a result, prices in the U.S. could soar as domestic supplies dwindle to supply China.
Alberta sources for plant-based protein
Robert Fernandez, director of economic diversification for Parkland County, wants to expand pulse production in the region. With the demand for plant-based proteins across the world, including China, the region could position itself to sell products. However, China is already a major plant protein producer, taking 55 per cent Canada’s total exports of raw dried peas which it uses to make noodles leaving protein as a by-product.
Forced labour concerns in trade with China
The federal government took steps on three fronts to prevent Canadian companies from using or engaging in forced labour as the outgoing U.S. administration declared a genocide in Xinjiang, China. For Canadian imports from China, Canadian companies, particularly those which receive products from Xinjiang, are urged to examine the source and ensure that the goods did not result from forced labour. For exports, Canadian companies must pledge not to export products that could be used for surveillance, repression, arbitrary detention or forced labour. Canadian companies in Xinjiang will be warned not to use forced labour or engage in human rights abuses. Conservative Party of Canada members of Parliament want Canada to formally declare that the Chinese government is committing genocide against the Uyghurs.
- Lawrence Herman, senior fellow at the C.D. Howe Institute, examined Canada’s investment agreement with China in light of the EU-China investment agreement. The agreement is in effect until 2029 and, despite current tensions and concerns, ties Canada’s hands in terms of what the country can do.
- The Chinese government has sanctioned 28 U.S. government officials following the declaration of genocide from the outgoing U.S. administration. The move prevents those who are sanctioned and those affiliated with them from doing business with China or any Chinese companies; those sanctioned and their families cannot travel to Mainland China, Hong Kong or Macau.
- China granted Canadian officials access to an in person visit with Michael Kovrig but not Michael Spavor due to COVID-19 restrictions. The visit between officials and Kovrig took place on January 21.
- The U.S. government was concerned after Canada initially determined it would grant Nuctech, a Chinese company, the contract for embassy security equipment. Global Affairs Canada has since said it would not move forward with the contract following a security review.
- China is now the world’s leader in new foreign direct investment according to a report from the United Nations Conference on Trade and Development. The United States previously led.
- The Hong Kong government may require 300,000 dual Canadian-Hong Kong citizens to declare which citizenship they wish to keep in order to access consular services. The change would align Hong Kong with Mainland China’s policy and could force current dual citizens to lose different rights depending on how they choose.
– Stephany Laverty, 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.