BC exporters feel chill in Canada-China freeze

Wednesday 13 Mar 2019

Canada: For some of BC’s largest export sectors, a potential disruption of trade with China – the spectre of which has risen after the arrest of Huawei Technologies' CFO Meng Wanzhou last December – would be severe if not catastrophic.

That is the view from several BC officials in industries such as forestry, seafood, wine and international education, where efforts to diversify their markets beyond the United States, as promoted by Ottawa and the provincial government in the last decade, have helped build deep links with China’s economy as the latter grew to become Canada’s second-largest trade partner.

As for one of BC’s biggest exporters to China, the forest products sector, a top official said she remains optimistic despite the risk of Ottawa’s relationship with Beijing deteriorating as the Meng extradition case to the United States progresses.

“It’s not the only place where we have, from time to time, difficult trading issues,” said Susan Yurkovich, president and CEO of the Council of Forest Industries. “I mean, we’ve had trade issues with the US, too. It’s part of being in an export industry in an export country, and you are going to run into complications from time to time. We have to find a way to work through them.”

China is again the second--largest destination for B.C. wood-product exports, taking up about 25% of the total (export values reached $326 million in August 2018, compared with $693 million to the United States during that same period). But Yurkovich said the country’s demand for higher-density and institutional wood buildings, and a renewed focus on green housing, means that B.C.’s forest sector will continue to treat China as a priority market.

“We really started in China with low-grade exports,” she noted. “It was to find a home for a lot of the wood impacted by the mountain pine beetle. What we are doing now is moving up the value chain, putting wood into manufacturing and different applications, and we are seeing that market mature. It’s still a price-sensitive market, especially when you see the depreciation of the ruble, which made [Russia’s] products relatively cheaper, and of course that’s an issue. But we are really trying to move up the value chain and looking at other applications, which are different than what we had in the beginning.

“I know there’s lots of stuff happening between Canada and China, but what we see is that we’ve built strong customer relationships in China, and we are committed to that market. We are going to continue to focus on that market moving forward, no question.”

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Source:Business in Vancouver

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