What does Canada trade with China?

Foreign Affairs Minister John Baird is currently on a tour of Asian countries, in which he is expected to deepen Canada's business relationship with China, our second-biggest trading partner.

In a statement released on July 6, Baird said, “Strong trade winds are swirling across the Asia-Pacific region, and Canada, as a Pacific nation, will be a major player in these exciting times.”

The Canadian government has been open about wanting to increase trade with China. In February, Prime Minister Stephen Harper made a much-publicized visit to the populous Asian nation, the main focus of which was economic deal-making.

In 1997, China was Canada’s fourth-largest trading partner, with total annual merchandise trade of $8.7 billion. Now, it’s our second biggest trading partner (behind the U.S.).

According to Statistics Canada, Canada exported $16.3 billion worth of merchandise to China in 2011, and imported more than $48 billion.

Canada mainly exports natural resources to China, and largely imports manufactured goods. This makes the relationship somewhat unusual, says one expert.

“It’s a weird trade pattern,” says Gordon Betcherman, a professor at the School of International Development and Global Studies at the University of Ottawa.

“It’s exactly the pattern you would expect to see between a rich, developed country and a much poorer developing country – except it’s exactly flipped.”

Betcherman says Canada and China's unorthodox trade relationship is a reflection of Canada's resource wealth and China's reputation as "the world's factory."

Here’s a look at what is being traded.

Manufactured goods make up the bulk of what we import. The single biggest category is mechanical appliances and electrical equipment — in April alone, we imported $1.7 billion worth of consumer items like washer/dryers and DVD players from China.

In that same month, we also imported over $440 million worth of other consumer goods, including toys and clothing.

Other major imports include plastics and rubber, as well as rare earth metals (like yttrium and cerium), which are used in the manufacture of hybrid cars, plasma screens and portable computers.

In a nutshell, commodities and natural resources.

“Mineral products” made up $4 billion — or 25 per cent — of Canadian exports to China in 2011. The major items include nickel, copper and in recent years potash, which is used in the manufacture of fertilizer.

China is also a major buyer of our wood and paper products, which accounted for $1.4 billion in 2011, as well as fish products and oilseeds like canola.

Simply put, oil. We currently export 99 per cent of our energy products to our southern neighbour. But Washington’s indecision on the Keystone XL pipeline — which would take crude from the Alberta oil sands down through Nebraska to Texas – has led Harper to talk openly about diverting oil to Asia.

China’s interest in Canadian crude is well established, given that the Asian giant has made multi-billion-dollar investments in Canadian oil companies like Syncrude, Athabasca Oil Sands and Penn West Energy.

China’s state-owned company Sinopec is a financial backer of Enbridge’s proposed Northern Gateway pipeline, which would funnel oil from Alberta to the B.C. port city of Kitimat, where it could then be shipped to China.

“China’s just hungry for oil, and everybody around the world – and China’s no different – is hedging their risks on oil, because there are so many uncertainties about the main suppliers of oil worldwide,” says the University of Ottawa's Betcherman.

“Of all the potential sources of oil, Canada is a very stable, reliable supplier, if the relationship gets going.”