Trade between Canada and China is booming despite diplomatic tensions between the two countries.
New data shows that China’s share of Canadian trade is moving higher despite the worst diplomatic crisis between the two countries in recent memory. Total exports and imports with China now represent 6.9% of Canada’s global merchandise trade, on a year-to-date basis.
That’s almost a full percentage point higher than the average in the previous three years and is the highest share on record, according to Statistics Canada.
The increase in China’s trade share reflects the fact that shipments between the two countries are holding up, even as they slump with Canada’s other major trading partners. Large swathes of North America were shut down this year to limit the spread of COVID-19, while China’s economy returned to more normal levels comparatively quickly.
The robust trade flows are in stark contrast to the tattered foreign and diplomatic relations between the two nations, which cratered after Canada’s arrest of a top Huawei Technologies Co. executive in late 2018 and the subsequent detainment of two Canadians in China.
China’s share of Canadian trade is increasing as commerce between Canada and the U.S. declines. Merchandise trade with the U.S., Canada’s largest trading partner, is down 17% this year, and now represents 67% of the total, compared with 69% on average in previous years.
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