A study by Canadian and Chinese officials on their two countries’ economic relationship, released this week, is an impressively substantive work, which invites the inference that a sectoral approach to Canadian-Chinese trade is more practical than a comprehensive deal such as the North American free-trade agreement.
The explicit theme is the countries’ economic complementarities, in seven sectors (agriculture, clean technology, machinery, natural resources, services, textiles, and transportation infrastructure and aerospace). For each sector, the report discusses bilateral trade patterns, ongoing co-operation, bilateral challenges and the complementarities and opportunities for growth.
“Complementary” suggests mutually beneficial differences. It does not suggest direct competition, but rather dividing things up, according to the comparative advantages of the two countries. For example, Canada can grow far more grain than Canadians can consume, so China is happy not to create any barriers to its importing of the Canadian food surplus.
There seems to be a genuine desire for deepened economic relations, but not to compete head-on or to surrender many protectionist measures.
The Chinese government continues to have a large role in guiding that country’s corporations. Consequently, the economies of China and Canada are much less like each other than those of the United States and Canada, and there is no political will for a shared zone of internal competitiveness.
On investment, the almost completed Canada-China Foreign Promotion and Protection Agreement may have a broad scope, but in practice it may be applied largely in the seven selected sectors.
Specifically referring to the natural-resource sector, the study cautiously suggests greater “clarity, efficiency and predictability of inward investment-related regulations,” a topical point given the proposed purchase of Nexen Inc. by the Chinese state-owned oil company CNOOC Ltd.
For the near future, the symbiotic or complementary approach, agreed upon in 2010 by Stephen Harper and Hu Jintao, the Chinese President, is the viable way forward for trade liberalization between China and Canada.