China in Canada

It is worth notice that much of China’s investment went into roads, bridges, factories and ports, all of which helped propel China’s economic ranking past the U.K., Germany, and Japan within the past decade. Over the recent few years, Chinese firms kept coming to North America, but they tended to tiptoe in, buying up small energy firms, minority stakes in bigger companies or working interest in specific projects. Canada's economic reliance on the U.S. has ebbed for decades amid sporadic efforts to diversify. But weak demand from a prolonged economic downturn south of the border has accelerated the move, sending Canadian companies looking for new markets. Since China also required commodities like coking coal, a key steel-making ingredient, this benefited Canadian commodity producers. The Vancouver-based company ships about 15 to 20 per cent of the 25 million tonnes of coking coal it produces annually to China, according to analysts. For example, Ford Motor Co. said on Wednesday that its second-quarter results were boosted by a strong performance in the Asia-Pacific, including China. At the same time, China is the biggest potash consumer in the world. In March, Igor Medge , the vice president of AgriKalum, a Saskatoon-based potash-mining start-up, was trolling for around $2 billion in financing at a Toronto mining conference swarming with Chinese executives and government officials.

The shift is sharpest here in Western Canada, rich in resources and closer to China. Last year for the first time ever, British Columbia sent more exports to the Pacific Rim than to the U.S. Chinese investors have beat out U.S. investors in Canada's oil patch every year since 2009, pumping $12.8 billion into companies and projects since then. What’s more, Chinese companies started to pour billions into Canadian energy companies. In late 2008, China Petroleum & Chemical Corp., also known as Sinopec, said it would buy Canada's Tanganyika Oil Co., which had most of its production in Syria, for $2 billion. A year later, Sinopec struck again, buying Addax Petroleum, another Canadian-listed firm with operations in Iraq and West Africa, for $7.2 billion. China is progressively expanding her influence in North America by investing in resource and energy industry. It is apparent that “diversification” is her fundamental, strategic objective, to get the resources from where they are to where they are wanted.

 

1.     The Wall Street Journal, 2013. Resource-Rich Canada Looks to China for Growth http://online.wsj.com/news/articles/SB10001424052702304177104577311921156382152 (accessed May 13, 2013).

2.     The Wall Street Journal, 2013. Canada’s Growing China Trade Connection http://live.wsj.com/video/canada-growing-china-trade-connection/C5EC68E9-3404-4344-A5B7-D94C4888D0D3.html#!C5EC68E9-3404-4344-A5B7-D94C4888D0D3