GOVERNMENT AND PUBLIC SECTOR

Government and Public Sector

China is a vast economy offering opportunities for companies from diverse sectors to tap into a large and growing market for their products and services. Canadian governments at the local, provincial and national level wanting to leverage these opportunities are well advised to seek connections with their Chinese counterparts.

As seen from recent and ongoing trade disputes, having a diversified network of trading partners is a wise strategy. The US has traditionally been Canada’s largest trading partner, yet the country’s 2018 decision to impose tariffs of 25% on imports of Canadian steel and its growing shale gas market that will likely see the country become an exporter of natural gas^[1] are just two recent examples that point to the value of having robust trade connections and relationships with more than one country.

Canada and China’s trade history

Diplomatic relations between Canada and China were established in 1970, but our countries have connections that extend far earlier. There are strong personal relationships between the two countries: in 2017, over 1.3 million Canadian residents were of Chinese origin and more than 140,000 Chinese students attended Canadian educational institutions.^[2]

After the US, China is Canada’s largest trading partner, accounting for US$18.2 billion in exports in 2017, up almost 15 percent from the year before.^[3] China was the destination for 4.3% of all Canadian exports, with top goods primarily being agricultural or resource-based, such as oil seeds, wood pulp, wood, mineral ores and fuels.^[4]

Trade in services also represents important connections between the two countries. Canada West Foundation notes that China is Canada’s third-largest market for services (after the US and the UK), with tourism, students and investments being key areas. In 2017, China invested in $8.4 billion in Canada, primarily in consumer products, entertainment and real estate, and oil, among other sectors.

Trade missions help build important relationships

Trade missions play an important role in establishing and building relationships between governments and businesses. Led by key government leaders, these missions enable their participants to meet with government decision-makers, network with local businesses, meet with potential partners, gain on-the ground knowledge of market opportunities and better understand the legal, regulatory and bureaucratic environment.

Relationships are central to business in China. In-person, face-to-face meetings are extremely important in building the trust needed to form successful long-term partnerships.

As such, it’s essential for both businesses and representatives of governments at all levels to invest the time through trade missions and other avenues for government-to-government and business-to-government discussion to happen.

March, 2019

^[1] Natural Resources Canada, Economic Implications of Shale and Tight Resource Development.

^[2] Government of Canada, Canada-China Relations.

^[3] Trading Economics, Canada Exports By Country.

^[4] Asia Pacific Foundation of Canada, Canada’s Merchandise Trade with China Statistics, June 2019.