China
China’s probe of Canadian canola will put both exports and farmers in jeopardy
Ongoing tariff wars between China and Canada arise from geopolitical tensions, impacting canola exports and threatening Canadian farmers. Both nations must navigate trade policies cautiously to avoid further retaliation.
Tariff wars are a recurring feature in the global trading system, and tensions between China and Canada have been ongoing for years. These tariff wars are largely driven by geopolitical tensions.
In 2019, for instance, China banned Canadian meat imports following the detention of Huawei’s chief executive officer, Meng Wanzhou. Although China cited the use of banned feed additives in Canadian meat as the reason, many viewed it as a diplomatic response to the rift between Ottawa and Beijing.
Now, China is threatening to investigate Canada for potential dumping of canola into its market. In international trade, dumping is a type of price discrimination where a product is sold at different prices in domestic and export markets. Essentially, it involves selling a product in a foreign market at a price lower than its normal value in the home country.
This decision came after Canada imposed a 100 per cent tariff on electric vehicles and a 25 per cent tariff on steel and aluminum from China effective Oct. 1, 2024. It’s clear this move by China is a direct retaliation for the tariffs on electric vehicles.
Trade tensions between countries can severely disrupt international trade. My previous research demonstrated how trade tensions between Canada and the United States during Donald Trump’s presidency negatively impacted trade between the two countries, particularly in the agri-food sector.
The mere threat of an anti-dumping duty can discourage imports, making anti-dumping laws a form of non-tariff barrier, even when the duty is not actually imposed. Although China has only announced a dumping investigation, the prices of canola oil futures are already being impacted.
A canola plant in full bloom is pictured near Cremona, Alta., in July 2024.
THE CANADIAN PRESS/Jeff McIntosh
Anti-dumping procedures
As members of the World Trade Organization (WTO), both Canada and China are required to ensure their trade policies comply with its regulations.
Under the WTO framework, members can take action against dumping to protect their domestic markets. However, such actions must follow the established WTO protocols, including filing complaints through the organization’s dispute settlement mechanism.
The WTO’s Anti-Dumping Agreement outlines how countries can respond to dumping. In this case, China would need to prove that Canada is dumping canola, quantify the extent of the dumping and demonstrate that it is causing or threatening harm to Chinese canola farmers.
If China’s investigation uncovers evidence of dumping, it has the right to impose anti-dumping duties. These duties are applied when dumping is proven and shown to have harmed the domestic industry.
The threat or imposition of such duties could significantly disrupt Canada’s canola exports to China, which would have serious implications for Canadian farmers who rely heavily on global markets to sell their products.
Canada’s canola export to China
Canada exports 90 per cent of its total canola production, with exports of canola seed, oil and meal amounting to $15.8 billion in 2023. China is Canada’s second-largest importer of canola, after the U.S., with imports totalling $5 billion in 2023.
This means China accounted for nearly one-third of Canada’s total canola export value that year. Notably, China is the largest market for canola seed, while the U.S. is the largest market for canola oil and meal.
Canola is predominantly exported to China in its primary form (seed) rather than as processed products (oil and meal). The data shows there were stable exports to China from 2014 to 2018, but there was a sharp decline in canola seed exports starting in 2019, which persisted until 2023.
The quantity of Canadian canola products imported by China over the years.
(Canola Council of Canada)
This drop coincides with a period of diplomatic tension between Canada and China, suggesting that trade disputes can have a significant negative impact on bilateral trade. Thus, signalling the current trade war could have devastating effect for canola farmers, especially as China accounts for about 65 per cent of Canada’s canola seed export.
Additionally, Canada’s canola exports have shown limited diversification, relying heavily on just four countries: the U.S., China, Mexico and Japan. Together, these countries accounted for 98 per cent of Canada’s total export value in 2023.
The U.S. led with imports worth $8.6 billion, representing 54 per cent of Canada’s total exports, followed by China with $5 billion (32 per cent), Mexico with $1 billion (six per cent), and Japan with $883 million (5.6 per cent).
Canada’s canola exports heavily rely on the U.S., China, Mexico and Japan.
(Canola Council of Canada)
This heavy reliance on few markets heightens Canada’s vulnerability to trade disruptions. If China imposes anti-dumping tariffs, this could make Canadian canola not competitive in the Chinese market, Canada could risk losing 30 per cent of its canola export value to other potential suppliers. The Canola Council of Canada has acknowledged China as an important and valued market for Canada’s canola.
What’s the way forward?
A canola grower checks on his storage bins full of last year’s crop of canola seed on his farm near Cremona, Alta., in 2019.
THE CANADIAN PRESS/Jeff McIntosh
Like many advanced economies, Canada seeks to shield its domestic market from the influx of low-cost Chinese products, such as electric vehicles. However, Canada must exercise caution, particularly when adopting trade policies from larger economies like the U.S. and the European Union.
These larger economies hold greater leverage in international trade negotiations, unlike Canada, a small open economy that faces greater risks in engaging in a trade war with China.
Moreover, to support a swift transition to a green economy and help Canada meet its climate target of achieving 100 per cent zero-emission vehicle sales by 2035, it is essential that electric vehicles become more affordable for the average Canadian.
Instead of escalating trade tensions with China, Canada should explore alternative measures such as safeguards or tariff rate quotas on Chinese electric cars. Those approaches could be mutually beneficial and less likely to provoke a tit-for-tat retaliation.
Imposing a prohibitive tariff on electric vehicles from China would come at the expense of other Canadian sectors that rely on Chinese buyers. Canada must tread carefully to avoid sacrificing jobs in the agricultural sector while trying to protect those in the automobile industry.
Canola farmers, in particular, would likely bear the cost of Canada’s unilateral tariff on China. Numerous other sectors could also be targeted, as China would likely retaliate by matching the impact on its own exports.
Canada must strive to minimize diplomatic tensions and avoid trade wars with major global market players, as such conflicts are becoming increasingly frequent. Recent trade disputes, including those with the U.S. during the NAFTA renegotiation, Saudi Arabia over human rights issues and China following the detention of a Huawei executive, can significantly undermine Canada’s export competitiveness.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Business
HSBC Chairman to Head Key UK Business Delegation to China
HSBC Chairman Mark Tucker will lead a UK business delegation to China next month to boost trade and investment, amid concerns over national security and improving UK-China relations.
HSBC Chairman Leads UK Delegation to China
HSBC Chairman Mark Tucker will lead a pivotal British business delegation to China next month, marking the first significant visit since 2018. The trip aims to enhance Chinese investment in the UK, guided by Chancellor Rachel Reeves. Tucker, a seasoned financier with extensive Asia experience, is regarded as essential in resetting UK-China relations.
Reviving Economic Dialogue
Tucker will accompany senior bankers in seeking to rejuvenate trade, specifically focusing on financial services. Although there are apprehensions among some UK lawmakers regarding national security threats posed by closer ties to Beijing, the UK Treasury spokesperson confirmed Chancellor Reeves’ upcoming discussions on economic cooperation in Beijing.
A Shift in UK-China Relations
Since suspending most dialogues following China’s imposition of a national security law in Hong Kong, UK-China relations have soured. Nevertheless, the Labour government is prioritizing improved ties with China, emphasizing investment opportunities. Reeves asserts the necessity of a pragmatic approach to benefitting national interests amid ongoing concerns voiced by some lawmakers about security risks.
Source : HSBC Chairman to lead pivotal UK business delegation to China
China
China’s November 2024 Economy: Navigating Mixed Signals and Ongoing Challenges
In November 2024, China’s economy exhibited mixed results: industrial production rose by 5.4%, while retail sales grew only 3%, below forecasts. Fixed asset investment also faltered. Policymakers are anticipated to introduce measures to stimulate domestic demand and combat deflation.
China’s economy showed mixed performance in November 2024, with industrial production and exports showing resilience, while retail sales and fixed asset investment underperformed, amid ongoing challenges in the property sector. Policymakers are expected to implement targeted fiscal and monetary measures to boost domestic demand and address deflationary pressures.
The National Bureau of Statistics (NBS) has released China’s economy data for November 2024, revealing a mixed performance across key indicators. Retail sales grew by 3 percent year-on-year, a significant slowdown from October’s 4.8 percent growth and well below the 4.6 percent forecast. Industrial production, however, showed resilience, rising by 5.4 percent and exceeding expectations of 5.3 percent growth.
The property sector continued to drag on the broader economy, with real estate investment contracting by 10.4 percent for the January-to-November period, further highlighting the challenges in stabilizing the sector. Fixed asset investment also fell short of expectations, growing by 3.3 percent year-to-date, down from 3.4 percent in October.
In November, China’s industrial value added (IVA) grew by 5.4 percent year-on-year (YoY), slightly accelerating from the 5.3 percent recorded in October. This modest improvement reflects continued recovery in key industries, supported by recent stimulus measures aimed at stabilizing the economy.
The manufacturing sector led the growth, expanding by 6.0 percent YoY, while the power, heat, gas, and water production and supply sector grew by 1.6 percent. The mining industry posted a 4.2 percent YoY increase. Notably, advanced industries outpaced overall growth, with equipment manufacturing and high-tech manufacturing rising by 7.6 percent and 7.8 percent YoY, respectively, underscoring the resilience of China’s innovation-driven sectors.
Key product categories showed robust output gains in November:
From January to November, IVA increased by 5.8 percent YoY, maintaining steady growth over the year despite headwinds from a slowing property market and external uncertainties.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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China
Ukraine war: 10% of Chinese people are willing to boycott Russian goods over invasion – new study
Since Russia’s 2022 invasion of Ukraine, some Chinese citizens express dissent through potential boycotts of Russian goods, reflecting a complex relationship despite government support for Russia.
Since Russia invaded Ukraine in 2022, the Chinese government has been criticised for its refusal to condemn the war. In 2024, the economic and diplomatic relationship between the two nations appears stronger than ever.
Because of strict censorship and repression imposed by the Chinese Communist Party (CCP), it is difficult to know the extent to which the general public shares their government’s support of Putin’s regime. But a newly published study I carried out with colleagues found that more than 10% of Chinese people surveyed were willing to boycott Russian goods over the war in Ukraine.
This is a surprisingly large figure, especially since existing surveys indicate that Chinese people hold a broadly positive view of their neighbour. We used a representative sample of 3,029 Chinese citizens for this research, to dig into public attitudes to Russia. The survey was done in 2022 after the Ukraine invasion.
We were aware that due to widespread censorship, our participants might not be willing to give honest answers to questions about Russia’s actions in Ukraine. They might also not feel safe to do that in a regime where disagreement with the CCP’s position is often met with harsh punishment. This is why we asked them to tell us if they would be willing to boycott Russian products currently sold in China.
We felt this question was a good indicator of how much the participants disapproved of Russian foreign policy in Ukraine. More importantly, we were also curious to find out whether Chinese citizens would be willing to take direct political action to punish Russia economically for its aggressive behaviour.
In our study, we split respondents into the three different ideological groups in China: “liberals”, who support the free market and oppose authoritarianism; “the new left”, who sympathise with the policies pursued in China under Mao Zedong; and “neo-authoritarians”, who believe the Russian-Ukrainian conflict is an extension of the rivalry between authoritarian China and the liberal United States. These groups were based on the main political beliefs in China.
We found that liberals were most likely to say they were willing to boycott Russian products. Liberals believe that China should work with, rather than against, western democracies. They also place a high value on human rights and democratic freedoms. Because of their beliefs, they are likely to think that Russia’s actions against Ukraine were unprovoked, aggressive and disproportional.
Chinese and Russian economic and diplomatic relations seem closer than ever in 2024.
American Photo Archive/Alamy
The new left and neo-authoritarians we surveyed were more supportive of Russian products. The new left see Russia as a close ally and believe that Nato’s expansion in eastern Europe was a form of aggression. Neo-authoritarians, on the other hand, believe that supporting Russia, an allied autocracy, is in China’s best interest.
Boycotting Russian goods
Asking Chinese participants if they are willing to boycott Russian products might seem like a simple matter of consumer preferences. However, our study reveals a great deal about the way in which regular citizens can express controversial political beliefs in a repressive authoritarian regime.
Boycotting products of certain companies has long been studied in the west as a form of unconventional political action that helps people express their beliefs. However, in the west, boycotting certain products is simply one of many ways people are able to take political action. In a country such as China, boycotting a Russian product might often be the only safe way to express disagreement with the country’s actions.
This is because citizens do not have to tell others they chose not to buy a product, and their actions are unlikely to attract the attention of the authorities.
Since Russian goods are readily available to Chinese consumers and China is encouraging more Russian exports to reach its market, the Russian economy could be significantly affected by an organised boycott campaign in China. The considerable level of support for a boycott expressed by some of our participants, as well as previous acts of solidarity with Ukraine in China, suggest that such a campaign could already be taking place in the country.
This could harm Russia because it regularly exports a number of different products such as meat, chocolate, tea and wine to China. These goods made up 5.1% of China’s total imports in 2023 – and this figure is likely to increase if Russia becomes more isolated from the west, and therefore more dependent on China for its trade.
While 5.1% of the Chinese market might seem like a low figure, China is home to over 1.4 billion people. In this context, even a small boycott could result in a serious loss to Russian companies.
Our research shows that Chinese citizens don’t always support the official position of the communist party. It also shows that many people there will express even the most unpopular political opinions – if they can find a safe way to do it.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
- HSBC Chairman to Head Key UK Business Delegation to China
- China’s November 2024 Economy: Navigating Mixed Signals and Ongoing Challenges
- Ukraine war: 10% of Chinese people are willing to boycott Russian goods over invasion – new study
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- Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
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