Premier Christy Clark sets off for her first Asian trade mission this week amid fresh signs that the power of China’s markets to act as a catalyst for the B.C. economy is weakening.
In July, Ms. Clark travelled to a small native village on B.C.’s north coast to mark the grand reopening of the Kitwanga sawmill. It was celebrated as a success story of her government’s efforts to market wood products in China.
Three months later, the mill is shuttered once more.
The mill’s owner is blaming “inventory adjustments” in China that have had a domino effect on the forest industry in B.C.
However, Ms. Clark said Tuesday she is untroubled by the cooling of China’s economy, saying it is still ripe territory for B.C. trade.
“I think 9-per-cent [economic]growth is still pretty good,” she told reporters. “The range of needs that China has, that British Columbia can supply, are absolutely mind-boggling. So we need to be there making sure they know we have these products, that we can help fuel their growth.”
Ms. Clark leaves Friday for a two-week trip to China and India with more than 200 business leaders in tow.
B.C.’s forestry exports to China have been trumpeted as a triumph of government marketing in recent months. In August, the government highlighted the fact that sales to China, in the first half of the year, had eclipsed exports to the U.S. for the first time.
And some companies are now investing in mill expansions – Western Forest Products announced last month it is planning a $200-million capital investment thanks to Asian markets.
But Wayne Young, president of Pacific BioEnergy, which owns the mill at Kitwanga, said the economic good news was lagging – sales were already starting to sag in August.
“Things weren’t moving. The pull just wasn’t there,” he said in an interview. Although the Kitwanga sawmill was selling most of its products within Canada, the boost in sales to China was pushing up prices and creating more of a seller’s market.
By September, the company stopped bringing in logs, running down its inventory before shutting down the operation in early October.
It was an abrupt turnaround. The mill, which had been closed for two years, is just one of two dozen that have reopened this year on the strength of the burgeoning sales to Asia.
“The market experts had concluded that the worst was behind us, things had stabilized, there had been a steady increase in pricing and demand in China had been significant,” Mr. Young said.
At the opening in July, Ms. Clark was ebullient about the mill’s prospects. “We are on the cusp in the northwest of British Columbia of something very, very big,” she said. “We are looking at an incredible resurgence for this region of the province, and I really believe it is the northwest that is going to be the economic engine of British Columbia.”
In the first nations village, Kitwanga, the closing of the mill is devastating.
Doug Donaldson, the New Democratic Party MLA for the region, raised the closing in Question Period on Tuesday after hearing concerns from now-jobless mill workers about the raw logs they see leaving their community – logs that will be processed overseas.
“The Premier got the photo opportunity, and the workers got pink slips. That’s this government’s job action plan in action,” he said. “We know that the Premier and her party are good at cutting ribbons, but when will the Liberals get serious about problems facing forestry and ensure B.C. logs for B.C. jobs?”
In her response, Ms. Clark said it was her government’s work in opening up Asian trade that helped mills around B.C. reopen this year. “We’re focused on finding customers for what B.C. produces,” she said, “and when we find those customers, when we make those deals, we will bring home jobs for British Columbians.”Report Typo/Error