Canada-China trade soars to record highs ahead of Prime Minister’s visit

Statistics from the China Institute at the University of Alberta reveal robust export growth, primarily driven by food and energy products. “Our exports are going to hit record highs this year, and the numbers are accelerating,” stated Philippe Rheault, director of the China Institute.

The increase represents a considerable recovery from the period of strained relations following the detention of Canadians Michael Kovrig and Michael Spavor in China, which occurred after the arrest of Huawei executive Meng Wanzhou in Vancouver in 2018.

Trade volume has expanded since an agreement reached last January, which lowered Chinese tariffs on Canadian goods in exchange for Canadian market access for Chinese electric vehicles.

Total trade between the two nations reached $36.78 billion in the third quarter, the highest quarterly figure ever recorded, largely fueled by energy exports.

Crude oil exports to China have risen dramatically, increasing by 159 per cent to an average of 327,000 barrels per day. This growth is largely attributed to the expanded capacity of the Trans Mountain pipeline. “Many anticipated that Canadian crude would primarily reach California, but that has been definitively proven incorrect; it’s now largely headed to East Asia, with the majority going to China,” Rheault explained.

Disruptions in the Middle East have also contributed to higher oil prices, impacting exports to both China and the United States.

Agricultural exports have also seen a notable increase, reflecting a reduction in Chinese tariffs. Canola meal exports jumped to $360.3 million from $12.9 million a year prior. Pea exports rose to $147.6 million from $9.2 million, and beef exports reached $181.4 million after a period of near absence.

While most provinces experienced increased exports to China, Alberta and Saskatchewan accounted for approximately 78 per cent of the overall growth. Alberta’s gains were primarily driven by crude oil, while Saskatchewan’s were boosted by canola meal, canola seed, potash, and peas, contributing to a national increase of roughly $4.32 billion year-over-year.

Experts caution that expanding trade with China carries inherent risks. “In 2024, nearly 70 per cent of our canola seed exports went to China, providing Beijing with significant leverage that it has previously utilized during political disputes,” noted Vina Nadjibulla, CEO of the Centre for Strategic Statecraft. “We should expand trade with China while simultaneously developing alternative markets to reduce strategic dependence.” Rheault highlighted that the figures demonstrate the impact of Canada’s renewed engagement with China and a shift in federal policy. “Some observers may be surprised by the proactive approach the prime minister and his government are taking in engaging with China, especially as the United States potentially reconsiders its relationship with Canada,” Rheault said.

Despite the increased exports to China, Canada still exports roughly ten times more goods to the United States.

Prime Minister Carney aims to double Canadian exports of goods and services to markets outside the U.S. by 2035, a goal in which China is expected to play a significant role.

Carney departs Wednesday for an Asian tour, including the ASEAN summit in the Philippines, the APEC summit in China – where he is scheduled to meet Xi – and the Francophonie summit in Cambodia.