An Essay on Bilateral Relations and Trade Between Canada and China

Abstract

China is the second largest economy in the world and Canada’s second largest trading partner. According to the government of Canada, the two countries generally maintain a co-operative relationship. However, Canada’s economic co-operation with China is still limited; the share of Canadian exports to mainland China was only 1.08 per cent in 2014 and 4.11 per cent in 2015, while China supplied 12.26 per cent of total Canadian imports in 2015. Since 2012, Canada‘s exports to China have declined. Also, foreign investment between Canada and China is limited and experienced a downward trend from 2013-2015. There is a huge potential for Canada to expand its market share in China. Based on facts and accredited sources, this thesis intends to study whether Canada should further enhance its political and economic ties with China, and to identify what the opportunities, challenges and barriers are to Canada-China bilateral trade. The research here mainly covers foreign investment and the most promising trade sectors with high economic complementarities, including agriculture, clean technology and natural resources. The findings indicate that it is mutually beneficial for Canada and China to deepen their economic ties.