Conflict over Canada’s detainment of Huawei Technologies Co. Ltd.CFO Meng Wanzhou has brought repeated calls in government, trade promotion and academic circles for Canada and B.C. businesses to divert trade away from the Chinese market.
But for B.C.’s forestry-products sector – often seen as one of the province’s fundamental industries, contributing $12.9 billion in GDP to the B.C. economy – those calls to diversify beyond Canada’s largest Asian trade partner have been met with defiance.
“We see more opportunities there still, so we won’t be turning away from China,” said Susan Yurkovich, president and CEO of the BC Council of Forest Industries(COFI). “Just the opposite: we will be continuing to focus on China as a market…. It will continue to be so for the foreseeable future.”
Perhaps surprisingly, one of the more recent calls for diversification came at the 2019 COFI Convention in Vancouver last month, when a keynote speaker, Robert Johnston, managing director of the global energy and natural resources division of the Eurasia Group consultancy, told attendees that resource producers should look to alternative markets like India.
In addition, China’s decision to ban canola imports from two major Canadian exporters, widely seen as retaliation against Meng’s arrest, has made some local trade analysts nervous when they look at the high percentage of Canadian and B.C. exports going to China. B.C. provincial ministers have turned trade attention in Asia to markets like South Korea and Japan, where established free-trade agreements and pacts like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership have lowered tariff barriers.
That diversification, says one U.S.-based analyst, makes sense, even with China’s economy being the world’s second largest at US$13 trillion in nominal GDP last year.