BC – Asia trade stats
BC Stats release – With the rapid economic growth of countries such as China and India, Asia has become a focal point for exporters looking to expand their marketplace. For British Columbia, Asia has long been an important destination for the province’s commodity exports, with the share of BC’s total goods exports rising above 25% in the 1970s and remaining there since.
In 1989, the share of BC’s exports shipped to Asia peaked at 37%, but the subsequent slowdown in the economy of Japan saw that ratio bottom out at 21% in 2001, before starting to rise again. In 2007, 27% of BC’s total goods exports were shipped to Asian destinations. Within Canada, British Columbia is by far the province most dependent on Asia as a destination for exports. Overall, only 7% of Canadian exports were shipped to Asian destinations.
After BC, Saskatchewan and Manitoba had the next highest share of goods shipped to Asia, at around 17% of total goods exports, a full ten percentage points lower than British Columbia. BC ships the greatest volume of goods to Asia Percent share of Canadian goods shipped to Asia, 2007 Source: Statistics Canada Other 4.6% Quebec 10.1% Ontario Manitoba 17.1% 6.4% Saskatchewan 11.4% Alberta 21.3% BC 29.0% British Columbia shipped more goods to Asia than any other province in 2007.
The province was the origin of 29% of Canadian commodity exports destined for Asia. Alberta ranked second, with 21% of the Canadian total. Within Asia, Japan continues to be the primary destination for goods from British Columbia. Although Japan’s share has slipped over the last decade, it was still the destination of almost half (48%) of BC’s exports to Asia in 2007. However, this was the first time in at least 60 years that shipments to Japan represented less than half of BC’s exports to Asia. In fact, back in the late 1960s and 1970s, Japan’s share often exceeded 85% and peaked at 91% in 1973.
Over the last decade, countries such as China and South Korea have become important markets for BC’s goods. Mainland China now takes in 20% of BC’s shipments to Asia and South Korea is the destination for another 15%.
In the last ten years, the value of BC’s exports to Mainland China has almost quadrupled. British Columbia ranks second only to Alberta as a source of Canadian exports to China. In 2007, Alberta was the origin of almost a third (32%) of Canada’s total shipments to Mainland China. British Columbia was the source of a fifth of all Canadian exports to China, followed by Ontario, at 16% and Quebec, at just over 10%. Over a third (37%) of Alberta’s exports to China consisted of ethylene glycol, a component often used in antifreeze. Alberta is the sole province in the country that produces this chemical.
For BC, pulp represented over half (59%) of the province’s shipments to China, with copper and other ores (10%) being the next largest commodity export.
The emergence of China as an economic superpower has created a resource boom, which has benefitted British Columbia, not only through the rise in exports of these goods to China itself, but also through the price increases the extra demand has produced, bringing more revenue from BC exports of those commodities to all markets.
On the flip side, rising commodity prices have contributed to the appreciation of the Canadian dollar, which has harmed exporters, and the influx of inexpensive finished goods from China has posed challenges for Canada’s manufacturing sector. As noted in a Statistics Canada report, “Overall, the emergence of China on the world economic stage has led to a complex reallocation, resulting in an increase in resource and service sector employment in Canada, and a reduction in manufacturing employment, the only non-farm goods sector industry that experienced a loss.”
Given that BC’s strengths are in the resource sector, China’s growth is likely more of a blessing than a curse for this province. Considering that Canada’s premiers are working toward a joint trade mission to China, the first ever such cooperative effort between the country’s first ministers, it is clear that there is recognition that China is a huge market that cannot be ignored. It is less certain that the value of India as a trade partner is universally recognized.
Like China, India has become more industrialized and is developing into an economic power. However, unlike China, there appears to be far less of a push to develop trade ties with India. Some of this may be due to India’s historical reluctance to pursue trade deals, as well as a lack of transportation infrastructure in that country.
Canada has shown interest in pursuing a free trade agreement and moved a step in this direction when Canada and India arrived at a Foreign Investment Protection and Promotion Agreement in June. Nevertheless, Canada is well behind its competitors in courting India. The value of Canadian goods shipped to India in 2007 was approximately $1.7 billion, of which $234 million originated in British Columbia. This ranked India as the 13th largest export market for Canada as a whole and the tenth largest market for BC.
Given the expanse of the Indian market, there are plenty of opportunities to significantly expand upon these figures. However, there has been substantial growth in exports to India, particularly for Canada as a whole. In the last decade, Canadian exports to India have quadrupled. British Columbia’s commodity shipments to India have also experienced strong growth, but they are still relatively small.
As with China, BC’s top exports to India are mainly resource products. Copper and molybdenum ores and concentrates top the list, followed by pulp and paper. These goods comprised approximately 90% of BC’s commodity exports to India in 2007. British Columbia (14%) ranked fourth in the country as a source of exports to India, behind Saskatchewan (34%), Ontario (16%) and Quebec (15%). Peas and potash were the prime exports from Saskatchewan.
While Canada may be behind in its efforts to woo India as a trade partner, talks with South Korea have been ongoing for a few years with respect to coming to agreement on a free trade deal between the two countries. While Canadian auto-makers are reticent of such a deal, complaining that South Korea uses non-tariff barriers to block imports of Canadian vehicles, British Columbia would stand to substantially benefit from a free trade agreement. South Korea is already BC’s fourth largest export destination and almost half (45%) of Canadian exports to South Korea originate in BC. Ontario ranks a distant second, with 22% of Canada’s exports to Korea shipped from that province.
Resource exports again dominate the types of goods shipped from BC to South Korea, with coal topping the list (37%), followed by pulp (18%), although aluminum and articles of aluminum (14%) were the third largest export in 2007.
The growing economic strength of these Asian nations is providing new marketplaces for exporters worldwide and British Columbia is uniquely placed to take full advantage. The province’s location and the types of commodities available for export are a perfect fit for trade with Asia, which should bode well for BC’s future economic prosperity.
