China's voracious demand for Canadian resources and commodities has pushed it into a tie with Japan as this country's third-largest export market, a study finds.
Canada's exports to the world's most populous country showed year-over-year growth of 43 per cent for a period between January and July, in the study published in the Canadian Economic Observer.
From 2002 to 2006, Canada's exports to China rose from $4 billion to $8 billion.
Demand for resources helped power exports as China, a nation of 1.3 billion, expands its manufacturing base and builds massive infrastructure projects ranging from bridges to facilities for the 2008 Olympics.
China, which has been suffering fuel shortages in recent days, has become Canada's second-most important crude oil customer, the study found.
Shipments of oil to China remain modest, with the value for the first three months of 2007 totalling only $150 million.
The two countries are experimenting with shipping Alberta oil through the port of Vancouver and the potential for increased sales is high, the study said.
The overall demand for resources and commodities helped drive prices up for a host of them, the study said. For example:
- Oil is trading at or near record highs and is about quadruple its 2002 value.
- Metals prices in 2007 are three times higher than they were in 2002.
All these factors work to increase the value of Canada's export shipments, it said.
The China factor has served to diversify Canada's exports, it said. About one-quarter of exports now go to U.S. markets, up from 16 per cent five years ago.
However, there was relatively little export growth to the U.S. One exception is Alberta's crude oil shipments there, it said.
"Ontario's exports to countries other than the United States posted the largest gain of any province, rising nearly $20 billion since 2002," the study said.
"Ontario's auto sector may have slowed, but the overseas demand for its nickel, gold, and uranium resources, as well as aircraft, high-tech and other machinery, is on the rise."
While Canada is selling more to China, it isn't buying substantially more from the Asian giant. Imports from China only grew 17 per cent in the first seven months of 2007 when compared to the same period in 2006.
