By Keith Norbury
Not surprisingly, given its proximity to Asia, B.C. is first among Canada’s provinces in the proportion of its exports destined for China.
B.C. also ranks highest among the provinces in the percentage of its imports that arrive from China.
Yet B.C. isn’t the only province where China is accounting for a larger portion of the trade.
“B.C. exports to China have been growing at 23 per cent compounded every year,” said Dr. David Fung, Chairman and CEO of the ACDEG Aspect Group of companies, and a former senior fellow of the Asia Pacific Foundation. “The next province that had the highest growth for the past five years is Quebec. Quebec’s exports to China have been growing at a compounded rate of somewhere between 12 to 16 per cent a year.”
China trade gains coincide with U.S. losses
B.C., though, remains the only province in Canada where exports to the U.S. represent less than half of the total exports of that province.
In 2011, the U.S. accounted for 42 per cent of exports of B.C. products, down from 68.8 per cent in 2002, according to a search of Industry Canada’s Trade Data Online website. In comparison, B.C. exports to China reached 14.8 per cent of the total in 2011, up from 2.6 per cent in 2002.
“I think it just demonstrates that British Columbia is starting to be less impacted by concerns about future growth of the United States,” Dr. Fung said.
The dollar value of B.C. exports to China reached $4.94 billion in 2011, over six times the $774 million exported in 2002. Meanwhile, B.C. exports to the U.S. dropped to $13.98 billion in 2011 from $20.68 billion in 2002.
China’s share of Quebec exports doubles
In Quebec, exports to China reached $2.45 billion in 2011. While that was only 3.85 per cent of total Quebec exports, it was more than double the $1 billion figure of 2008.
Dr. Fung attributed some of that increase to Quebec-based transportation and aerospace giant Bombardier, which has three joint ventures in China as well as several subsidiaries.
Bombardier was also a party to some of the 21 commercial agreements announced during Prime Minister Stephen Harper’s trade mission to China this past February. Among them was a memorandum of agreement between Montreal-based Bombardier Aerospace and China’s state-owned AVIC Leasing on financing commercial aircraft sales. Another announcement in Beijing identified China Express Airlines as the buyer of up to 11 Bombardier CRJ900 NextGen jets. That sale was originally announced in October 2011.
Michael Broad, President of the Montreal-based Shipping Federation of Canada, said he has noticed steady increases in Quebec-China trade in all areas, including exports of raw materials for the steel industry, such as iron ore from Quebec.
“And you can see the investment of Chinese companies up around Sept-Îles on the north shore of the St. Lawrence River,” Mr. Broad said.
In February 2012, for example, Labrador Iron Mines Holdings Limited announced a new deal with Iron Ore Company to sell iron on the spot market for delivery to Asia. The deal would allow ore to be shipped on Capesize vessels. Under a similar agreement in 2011, 412,000 wet tonnes of ore were shipped to China, with another 178,000 tonnes stockpiled at Sept-Îles for shipping this spring.
China’s fraction of exports rising steadily
From every region of Canada, exports are reaching the Chinese market, Dr. Fung noted. That includes potash from Saskatchewan, oil from Newfoundland and Labrador, water treatment systems from Ontario, and lumber and McCain’s french fries from Nova Scotia.
“So the whole of Canada is really involved with this trade with Asia. And your readers will have to provide the carrier capacity to make it happen,” Dr. Fung said.
For much of Canada, though, China still accounts for a fraction of exports. In Ontario, for example, that fraction was just 1.32 per cent in 2011. Still, that was almost triple the 0.47 per cent proportion in 2002.
And because Ontario’s total exports are huge – $181.57 billion in 2011 – Canada’s largest province still shipped $2.39 billion worth of products to China that year.
In Alberta, exports to China added up to $3.04 billion, or 3.35 per cent of the total. That was down from 3.86 per cent in 2009, but up from 1.68 per cent in 2003.
East Coast also hooks China exports
Even Canada’s East Coast, which is a much longer haul to China than Canada’s Pacific coast, is cashing in on China.
“What’s interesting is China has now become our number one destination,” said Michele Peveril, Senior Manager of Strategic Relations with Halifax Port Authority.
Figures compiled by the Port Authority showed that in 2011 Asia was the origin or destination for 45 per cent of its containerized cargo. That compared with 38 per cent to or from Europe. In 2006, the situation was reversed, with Asia accounting for only 40 per cent of container traffic while Europe had 46 per cent.
Digging deeper into that data revealed that China is the top Asian country for Halifax container cargo. However, Ms. Peveril declined to offer further details because of confidentiality concerns for the Port’s clients.
“We don’t have specific port-by-port or country-by-country reports that we can release because we find it gets a little too specific for the shipping lines,” Ms. Peveril said. “And they are sometimes hesitant about us talking about their volumes.”
When all forms of transportation are taken into account, however, Statistics Canada data tell a different story. The U.S. still dominates Nova Scotia exports, accounting for 73.29 per cent of the 2011 total. In comparison, China claimed only 2.57 of Nova Scotia exports in 2011.
On the import side, China accounted for 3.27 per cent of Nova Scotia’s 2011 imports. The U.S. did not show much better, being responsible for only 4.65 per cent of imports. The dominant import partner for Nova Scotia is Germany, responsible for 26.54 per cent of total provincial imports in 2011 and 36.66 per cent in 2010.
China exports go east and west
Top exports to China through Halifax are wood, wood pulp, and paper, Ms. Peveril said. The top three Chinese ports of destination of shipments originating in Halifax in 2011 were Shanghai, Ningbo, and Shekou. Halifax tends to target ports in the south of China because they present a “transit time advantage,” Ms. Peveril said.
“There are parts of China we really do not target because West Coast North American ports are much better suited to handle that trade,” she said.
Ocean cargo between China and Halifax now travels west, through the Panama Canal, or east, via the Suez Canal.
A decade or two ago, Halifax focused more on trans-Atlantic trade with Europe. About nine years ago, during research into cargo-growth strategy, the Port Authority identified promising, emerging markets in Asia.
“And what we’ve been pursuing since then has been a strategy which essentially targets Southeast Asia and Northern Europe as our primary markets,” Ms. Peveril said, “without excluding other markets that are important, like the United States and the Caribbean.”