The news that China's imports fell again last month, signalling a deepening slowdown in the world's second-largest economy, did nothing to dampen the celebratory mood of a group of Saskatchewanites in Beijing on Monday.
"In terms of exports per capita, Saskatchewan is way ahead of everybody," said Lionel LaBelle, the beaming president and CEO of Saskatchewan Trade and Export Partnership, on the sidelines of a meet-and-greet between Chinese businesses and Saskatchewan-based grain sellers, pulse growers, mining-equipment makers and potash marketer Canpotex at a luxury Beijing hotel yesterday.
The August data from China's customs bureau was hardly uplifting: Exports from China grew at 2.7 per cent year-on-year, up slightly from the previous month's 1 per cent but still below expectations. And imports fell, unexpectedly, by 2.6 per cent year on year.
Within those numbers, only imports of iron ore rose, up 7.9 per cent after low prices led domestic firms to cut production. Soybean imports were the lowest in six months, at 4.42 million tonnes. Imports of copper, crude oil and aluminum were all down from the previous month.
The dismal numbers, combined with an August consumer price index that inched upward to 2 per cent and other indicators showing slowing industrial activity, have led economists to scale back their growth forecasts for the year. China's National Development and Reform Commission has just published a sort of stimulus-lite program of building roads, airports and other infrastructure, most announced over the last few months, to the tune of one trillion yuan ($159-billion) – not yet the massive, four-trillion-yuan effort seen in 2008, but a signal that the Chinese leadership is also worried about cutting too close to this year's official GDP growth target of 7.5 per cent.
The competition for China's imports is growing fiercer, as the country's economy slows and demand – though still among the world's strongest for many commodities – drops off accordingly. Nine of Canada's 13 provincial and territorial leaders will be in China this week for the World Economic Forum in Tianjin, known informally as the summer Davos, once again promoting Canada's exports ranging from natural resources to Anne of Green Gables.
Fortunately for Saskatchewan's farmers, at the end of the day, everybody still needs to eat.
The province's exports to China jumped 103 per cent year-on-year in the first half of 2012, driven by potash sales and food exports. Turns out Saskatchewan's yellow peas, used in transparent vermicelli noodles, have caught on in China; the province is thought to provide 85 per cent of China's total pea imports and 20 per cent of its potash imports, according their own data.
Chinese demand for potash was widely expected to fall this year on falling food prices. But Canpotex is now in the second of a three-year deal to sell more than three million tonnes of the fertilizer to China's Sinofert, a state-connected firm listed on the Hong Kong stock exchange.
"We are marketing food and energy, and whether or not there is a recession, the world needs those," Saskatchewan Premier Brad Wall told reporters after addressing a polite luncheon crowd at Beijing's St. Regis Hotel, better known as President Barack Obama's home when last in town.
"Even when they're in recession, they grow at 7 or 8 per cent. That's quite a recession, by our definition."