SAO has merged into International Perspectives.
For new issues of SAO
please click
- Suresh Jaura
Publisher and Managing Editor


0712 flag pakistanSectarian violence in Karachi is just another chapter in Pakistan’s long history of violence against minorities, has afflicted Pakistan virtually from its moment of birth...


U.S. allies in Europe, Asia and the Middle East, smiling through their teeth, are feverishly hoping that Washington will maintain its security commitments. The Russians are ... . . ..   


A US revaluation of its Af-Pak policy appears likely under Trump... It is, however, unlikely that US AfPak policy under Trump will be ‘more of the same’. Crucially, Pakistan’s role in supporting terrorism in Afghanistan . . .


Escalation of hostility may become a thermonuclear WWIII.


Non-Muslims in violent conflict areas to enhance the security...


With approval of power plants, conflicts have arisen ...


Growing support for suicide terrorism


Export Success in China

AddThis Social Bookmark Button

By Peter G Hall
Vice-President and Chief Economist Export Development Canada

China-watchers – last time I looked, that was just about everybody – shuddered early this year. The Middle Kingdom’s stock markets were rocked on the first business day of 2016, stoking Fed-fed fears of further turmoil. The worry hasn’t waned; there’s a full-blown Sino-scrutiny industry at play, dissecting every detail of data in an effort to determine China’s staying power, or lack thereof. Canada cares, as China is now our number two trading partner. Is our dramatic diversification into this market over, on hold, or still a great opportunity?

Some context is necessary. Combatting the internal fallout of a global Great Recession, China embarked on a dramatic stimulus program in 2008. Sluggish subsequent growth pushed China to maintain and expand its stimulus over the past seven years, an enormous undertaking – but one that has left it with excesses, both real and financial. China now appears to be addressing those excesses: there’s more scrutiny of financial institutions, and mass layoffs appear to be imminent. It’s more than just a bit unsettling, as the broader impacts have yet to be felt.

How will China fare? Much will really depend on how it deals with a clash of poor demographic fundamentals, uncertain global growth, and how it manages an economy that is inescapably more open and subject to the vagaries of world economic fluctuations. China’s management of its increasingly open currency is a very visible test of its policy path.

As beneficiaries of China’s prosperity, Canadian exporters have a stake in the outcome. Prior to the New Millennium, Canadian merchandise exports to China made up less than 1 per cent of total exports. That share increased steadily over the past 15 years, growing almost five-fold at the peak in early 2013. However, since then, the share of exports to China slid below 4 per cent, not so much because of China, but thanks to the US economic recovery. Nascent concerns about Sino-softening are no doubt unsettling to Canadians doing business there, or planning to sometime in the near future. What are the prospects?

Recent data gives hope. Canadian exports surged into the New Year, hard on the heels of a very strong December showing. The ‘January jump’ boosted many industries’ fortunes, but the geographic sources of growth were concentrated. America was dominant, but exports to China also fared well. In fact, the recent increase adds to a steady upward movement that began in the spring of 2015. China’s share of Canadian exports is back on the rise, over 4 per cent again, and rising.

Which industries are benefiting? Unfortunately, our largest exports are unspectacular, and certain commodity exports are suffering. What’s holding things up is surprising performance of much smaller contributors. Canada is known for its auto exports, but not to China. But over the past 12 months, they have increased four-fold. Exports of foodstuffs have also been doing a roaring business. Processed meat exports are ballooning, more than doubling during 2015 alone. Beef and pork are the big drivers of this growth. Grain shipments are showing a decent uptrend, and fishing, likely capitalizing on a growing Canadian reputation in China, recently saw back-to-back increases that more than doubled export sales.

These movements are in small sectors, but they’re significant for one key reason: they are feeding an area of growing demand within China that represents one of the planet’s greatest go-forward opportunities. China’s long expansion is creating an ever-expanding class of wealthy consumers willing to pay premium prices for premium product. No longer is China just a consumer of commodities that feed factories that export to the rest of the world. China’s neo-wealth is moving its consumption up the value chain and employing new, more efficient and more accessible sales channels, turning the tables toward the world’s high value-added goods and services. Canadians who see this movement are already capitalizing on it.

The bottom line? Don’t write China off yet: it is still a huge source of global demand, but those demands are shifting. Thankfully for us, increased Chinese prosperity is creating demand for things that we produce further up the value chain that used to be out of reach. Maybe time to revisit your China export strategy.

[Source: EDC]

QR Code

QR Code








Help us provide you insight into South Asian issues.


We provide advertisers access to one of the largest and emerging South Asian markets.


Our goal is to be a comprehensive source of news and views on South Asia, India and Canada.


Since July 2001, South Asian Outlok Publisher and Columnists have been honoured for their work.

2008     2005   2004

Find us on linkedin
Follow Us