2022

State of China Canada Shipping

China is considered one of Canada’s leading merchandise trading partners and is an important supplier for Canadian businesses. 

While the volume of trade between Canada and China has started to pick up entering winter, the value of trade plummeted in the first half of 2022.  Compared to last year, Statistics Canada reported a 15.17% decrease in freight export shipping multimodal to China from Canada. 

While the volume of trade between Canada and China has started to pick up entering winter, the value of trade plummeted in the first half of 2022.  Compared to last year, Statistics Canada reported a 15.17% decrease in freight export shipping multimodal to China from Canada. 

As is well known, lockdowns in major cities, the closing of factories and shops, and problems with shipping and logistics caused a huge drop in Chinese demand for imported goods and services.

What made it hard for Canada to sell goods in China was the rising prices of their primary products. Russia’s invasion of Ukraine in February, created even greater disruption to global supply chains.

What Led To China to Canada's Shipping Decline?

As is well known, lockdowns in major cities, the closing of factories and shops, and problems with shipping and logistics caused a huge drop in Chinese demand for imported goods and services.

What made it hard for Canada to sell goods in China was the rising prices of their primary products. Russia’s invasion of Ukraine in February, created even greater disruption to global supply chains.

Canada plans to prohibit Huawei from its 5G network in May 2022, making it the fifth Five-Eye nation to do so after the United States, the United Kingdom, Australia, and New Zealand.

How China's Covid Shutdowns Keep Hitting Canada's Supply Chain.

Exports from Canada to China were sluggish in the first half of 2022, declining 14.42% from the same period in 2021 but in contrast, exports to the rest of the world rose by 29.21%, showing that declining exports to China is an anomaly in Canada’s greater export growth, which had an overall increase of 27.11%.

2022 YTD: Canada-China Trade

Canada China trade statistics Source: Trade Data Online ( Stats. Canada )

Conversely, shipments to other nations increased by 29.21%, demonstrating that Canada’s overall export growth, which gained 27.11% overall, is not affected by decreased exports to China.

Exports Canada to China Source: Trade Data Online (Stats Canada)

In months of Q2, freight exports to China decreased year over year: a significant decline in April 2022 (-14.4% YoY), a second significant decline in May (-19.3% YoY), and then a lower decline in June (-8.8% YoY).

Over the first half of 2022,  imports from China rose by 18.96% year over year, which was comparable to but somewhat less than the 21.15% growth in Canada’s imports from all other nations.

Chemical Woodpulp ($979.05 million, -19.2% YoY) and Iron Ores and Concentrates ($946.04 million, -31.4% YoY) were Canada’s next two biggest exports, and both saw declines from the first half of 2021.

Copper Ore ($745.37 million, 6.0% YoY) and Potassic Fertilizers ($572.00 million, 167.2% YoY), a newcomer that only entered the top five this year.

China Canada Import 2022 statistics Source: Source: Stats. Canada

Over the first half of 2022, they increased by 18.96% year over year, which was comparable to but somewhat less than the 21.15% growth in Canadian shipping imports from all other nations.

imports from china to Canada Source: Stats. Canada

Imports from China increased significantly in each of the first 3 months of the second quarter (by 20.5%, 17.7%, and 17.8%, respectively).

Product leaderboard: 

1. Automatic Data Processing Machines (4.94 billion, 12.0% YoY) 

2. Smartphones ($3.68 billion, 3.2% YoY). 

3. COVID-19 test kit product category this includes diagnostic or laboratory reagents ($1.08 billion, 2,559.0% YoY)

4. Furniture (994.34 million, 1.7% YoY)

5.  Motor Vehicle Parts (1.06 billion, 16.4% YoY)

Canada-China Shipping Stats 2022

EXPORTS

2022 Canada to China Export Stats 

IMPORTS


2022 Canada-China Shipping Import Data

Source: Stats. Canada – Customs Data

China’s COVID-Zero Policy

Commercial activity has been negatively impacted by China’s strict COVID rules. One of China’s major cities and the world’s financial and commerce center, Shanghai, which has a population of over 39 million, is shuttered and ceasing operations.

China’s COVID-Zero approach, prioritizes fewer overall COVID cases above hospitalizations, :180 million people were reportedly in complete or partial lockdown in 27 cities across China, including the capital Beijing. Chinese and world economy are extensive.

Many factories either shut down or had their production capacity drastically reduced. Radical methods, such as a “closed loop” system where workers live at the factory, have been put in place to keep factories operating. 

Even with these controls in place, however, plant productivity decreased, aggravating already-existing supply chain problems. However, despite these issues, China continued to send goods to Canada, with imports from China rising in each of the second quarter’s three months.

The decline in consumer demand, which, with a few notable exceptions, mostly led the contraction in Canadian exports to China, was the area in which Chinese lockdowns were a key problem for Canadian commerce.

Coal, an essential part of China’s energy generation, was the biggest exception. Chinese imports of Canadian coal nearly doubled compared to the first half of 2021 due to rising domestic demand and low stocks in China.

Other raw commodities, such wood pulp and iron ore, that are utilized in manufacturing, however, have decreased significantly. Owing in part to numerous restaurants closing for extended periods of time due to lockout, Canadian food exports were particularly heavily damaged.

Exports of soy and pork fell by 74.8% and 38.7%, respectively, from the first half of 2021. The recovery from devastating outbreaks of African Swine Fever (ASF) in China is reducing the demand for imported pigs, which is another factor contributing to the decline in pork exports. 

It is still obvious, though, that prolonged lockdowns in China had a significant negative impact on Canadian exports.

How Important Is China Canada Shipping Economy?

Canadian exporters ship numerous products to many destinations in China. Huawei and its partners have taken precautionary measures to offset the looming ban’s associated costs. 

Huawei has also made moves in Canada to shift its commercial focus away from 5G and toward R&D and consumer goods, such as smartphones and laptops.

Canadian firms such as telecom titans Bell and Telus, which reportedly spent millions of dollars on Huawei communications equipment, may be required to pay the price.

But Canadian telecom operators have already stopped using Huawei equipment and formed partnerships with other 5G telecom equipment makers. This suggests that the country’s losses may have been lessened.

Given that Canada and China’s political relations have been frosty for the past three years, the Huawei ban sends a negative signal for future trade and economic relations.

But it seems like the incident didn’t have much of an effect on business between the two countries, in part because their economies are so similar.

Despite growing calls for diversification, Canada continues to consider China an essential market for agricultural and agri-food products, metals and minerals, and fossil fuels.

China is very dependent on Canadian freight of wood products, minerals, grains, oilseeds, and fisheries. So, trade in traditional sectors are expected to remain stable.

However, there is an ongoing issue with platform technology surrounding national security and data privacy (This could be combined in one paragraph about Huawei)

How Important is China Canada Shipping Economy?

Canadian exporters ship numerous products to many destinations in China. Huawei and its partners have taken precautionary measures to offset the looming ban’s associated costs. 

Huawei has also made moves in Canada to shift its commercial focus away from 5G and toward R&D and consumer goods, such as smartphones and laptops.

Canadian firms such as telecom titans Bell and Telus, which reportedly spent millions of dollars on Huawei communications equipment, may be required to pay the price.

But Canadian telecom operators have already stopped using Huawei equipment and formed partnerships with other 5G telecom equipment makers. This suggests that the country’s losses may have been lessened.

Given that Canada and China’s political relations have been frosty for the past three years, the Huawei ban sends a negative signal for future trade and economic relations.

But it seems like the incident didn’t have much of an effect on business between the two countries, in part because their economies are so similar.

Despite growing calls for diversification, Canada continues to consider China an essential market for agricultural and agri-food products, metals and minerals, and energy.

As for shipping from China to Canada, China is very dependent on Canadian freight of wood products, minerals, grains, oilseeds, and fisheries. So, trade in traditional sectors are expected to remain stable.

However, there is an ongoing issue with platform technology surrounding national security and data privacy

What is the economical effect of China Canadian trade shipping logistics?

Trade and shipping between Canada and China were unavoidably damaged by Huawei incident, as both countries are major players in the global supply chain.

Canada’s primary export categories to China, including canola seeds, chemical wood pulp, and bituminous coal, all experienced price increases in the first three months of the year, which may be a significant reason for China’s decreased imports of Canadian goods.

Thirdly, global central banks, led by the United States, Canada, and the United Kingdom, are tightening monetary policies in an effort to battle inflation, resulting in a significant shift in exchange values.

Because Canada raised its interest rates quickly, the Chinese yuan kept going down, while the Canadian dollar went up. Between the beginning of January and the beginning of June, the exchange rate between the Canadian dollar and the Chinese yuan increased by nearly 6%.

The strength of the Canadian dollar may be damaging to its exports to China. The recent emphasis on Canada-China trade influences. 

The bad results should not be seen as a sign that trade and freight shipping between Canada and China is getting worse.

Is China Buying Canola From Canada?

With a self-sufficiency rate between 60 – 70%, China’s demand for vegetable oil continues to climb, and demand for canola oil remained solid even during the pandemic. 

China was the main importer of Canadian canola seeds in 2018, the year before the Huawei conflict, due to the country’s high demand for vegetable oil and limited domestic supply of oil seeds; imports declined in 2019 as a result of the political dispute*(a known fact?.)*

When the Canola Prohibition *(when did it begin, when lifted…*was lifted, China agreedto start buying canola from Richardson and Viterra again after a three-year ban. Richardson and Viterra are two of the largest canola exporters in the world.

In 2020 and 2021, bolstered by China’s increasing demand for vegetable oil, the U.S. and Canadian canola trade began to recover. In 2021, however, Canadian exports of canola seed to China were around half of what they were in 2018.

As a result of the conflict in Ukraine, Russia temporarily banned rapeseed exports, which further reduced rapeseed availability.*and this is relevant how?) *

Despite a good development in the Canada-China canola trade, there may not be a major increase in canola seed exports to China in 2022 due to weather, U.S. and European Union demand, and Canada’s improved domestic crushing capacity.

*In the long term, both Canadian shipping companies and canola growers will benefit from China’s rising demand for canola seeds and oil.

Is China buying canola from Canada?

With a self-sufficiency rate between 60 – 70%, China’s demand for vegetable oil continues to climb, and demand for canola oil remained solid even during the pandemic. 

China was the main importer of Canadian canola seeds in 2018, the year before the Huawei conflict, due to the country’s high demand for vegetable oil and limited domestic supply of oil seeds; imports declined in 2019 as a result of the political dispute.

When the Canola Prohibition was lifted, China has agreed to start buying canola from Richardson and Viterra again after a three-year ban. Richardson and Viterra are two of the largest canola exporters in the world.

In 2020 and 2021, bolstered by China’s increasing demand for vegetable oil, the U.S. and Canadian canola trade began to recover. In 2021, however, Canadian exports of canola seed to China were around half of what they were in 2018.

As a result of the conflict in Ukraine, Russia temporarily banned rapeseed exports, which further reduced rapeseed availability.

Despite a good development in the Canada-China canola trade, there may not be a major increase in canola seed exports to China in 2022 due to weather, U.S. and European Union demand, and Canada’s improved domestic crushing capacity.

In the long term, both Canadian sea freight forwarding companies and canola growers will benefit from China’s rising demand for canola seeds and oil.

What is the Impact of the Russia Ukraine War on Canada's Shipping?

In 2022, the Ukraine crisis is the biggest threat to global investment, trade, and economic growth.

Despite the complexity of its geopolitical implications for major economies, its global trade and investment effects are noteworthy.

The conflict has disrupted the China Canada shipping logistics networks for oil, agricultural, and metal products, resulting in unprecedented price hikes over the past few months

Western sanctions against Russia have had an effect on China’s economy, which has experienced a significant slowdown since the second half of 2021.

In addition, the war in Ukraine will increase the price of the energy, food, and raw materials that fuel China’s economic growth. 

In the first quarter of 2022, the Producer Price Index (PPI), a measure of factory-gate inflation, increased by 8.8% over the same time in 2021, pushing up consumer prices and further limiting China’s consumption and imports. 

Despite Canada’s extraordinary increase in earnings due to a matching rise in exports, the decline in demand for Canadian goods may exceed the profit increase. 

One example is the reduction in Canadian exports to China. Canada, in contrast, does not directly compete with Russia and Ukraine for Chinese exports.

Oil, natural gas, coal, and agricultural products comprise the majority of Russia’s exports to China, which are fundamentally unique from Canadian goods. Ukraine is China’s primary supplier of rice, wheat, and corn, as opposed to canola seeds, wheat, wood pulp, coal, and iron ore.

China’s primary suppliers are Ukraine, China’s primary supplier of rice, wheat, and corn, as opposed to canola seeds, wheat, wood pulp, coal, and iron ore.

Even though China bought more state foods like wheat and barley form Russia kn 2022, Canada is still the biggest exporter of wheat to China because its quality is better and its prices are lowerThe global economic slowdown and high inflation fuelled by the conflict are expected to restrain Chinese demand, which has already been reflected in the first quarter’s trade statistics.

Overall, the Ukraine war has had a major influence on trade and shipping between Canada and China.

What effect had Covid19 Pandemic on China to Canada Ocean freight Shipping ?

Pandemic-related restrictions appear to have had a greater and more immediate impact on China Canada shipping than the Ukraine war.

China’s planned 2022 zero-COVID strategy is controversial. The new way to stop infections from spreading is different because it involves thorough mass testing, targeted containment, and shorter periods of quarantine.

Under the zero-COVID policy, domestic consumption, commercial operations, and industry activities in China are suspended or restricted. 

Notably, domestic consumption suffered the most as a result of stringent COVID measures like lockdowns, quarantine, and comprehensive testing.

According to recent NBS data, retail sales declined by 0.7% in the first half of 2022 compared to the same period the previous year. 

Shanghai, a city of 25 million inhabitants, was completely walled off. April retail sales were down 48.3% year-over-year, and May sales were down 36.5%. In contrast, Beijing’s retail sales decreased by 25.7% year-over-year in May, compared to a loss of 16.6% in April. 

When Chinese spending went down, it was inevitable that Canadian exports to China would suffer.

Moreover, although the Shanghai lockdown has been lifted * (but see earlier reference to continued lockdown..?), it will take time for production and shipping logistics to return to normal, especially as long as the dynamic zero-COVID plan continues in effect. 

*China’s long-term COVID restrictions may make it harder for the global economy.*

What Has Happened To US-China Bilateral Trade?

The U.S.-China trade relationship is essential to global business and investment and acts as a leading indicator of future trends in international trade.

During the first half of 2022, it looked like the US-China shipping trade dispute had mostly stopped. However, several trade-related issues occurred, and flatbed trucking delays albeit without further deterioration in US-China economic relations.

China pledged to purchase US$200 billion worth of goods and services in 2020 and 2021 as part of the Phase One trade agreement, which brought an end to the trade war.

However, the COVID-19 epidemic and other factors delayed China’s compliance with the agreement between 2020 and 2021, and China only acquired 57% of the agreed-upon quantity of US goods and services. This complicates already tenuous US-China trade relations.

This complicates already tenuous US-China trade relations. According to available data, trade between the United States and China slowed in the first quarter of 2022.

According to available data, trade between the United States and China slowed in the first quarter of 2022. Canada is now the United States top trading partner, surpassing China. 

In its 2022 Trade Policy Agenda and 2021 Annual Report, which came out in March, the United States Trade Representative (USTR) stepped up competition with China in response to this bad news.

The research highlighted a variety of well-known issues, but none of them were addressed with viable solutions. 

But it was said that the United States would probably get rid of tariffs on some Chinese imports to fight rising inflation at home.

As a longtime ally of the United States, Canada’s commercial relations with China are highly influenced by US-China trade ties. 

Following Prime Minister Justin Trudeau’s inauguration in 2015, Canada-China commerce was expected to enter a “golden age,” but the bilateral economic relationship appears to have reversed due to the breakdown of Canada-China free trade talks in late 2017.

In 2018, the trade war between the United States and China and the Huawei dispute contributed to the ensuing economic slump. 

The United States has pledged to increase its competitiveness vis-à-vis China and has used its power on the international stage to persuade other nations to do the same.

It is a hint that the US-China competition has entered the mainstream and may last for an extended period of time. 

The complexity of the situation makes it more difficult for middle-power nations like Canada to maintain business ties with China. It’s not clear how well Canada’s efforts to keep the balance between the US and China will work.

 

What's The forecast For China Canada Shipping ?

As economic and political differences between China and Western countries continue to grow, business relations between Canada and China will continue to be difficult. *When the new US Indo-Pacific strategy is launched in the first half of 2022, this trend will become even more obvious.* Similar to previous geoeconomic initiatives such as the Comprehensive and Progressive Agreement for B3W (Build Back a Better World) and Trans-Pacific Partnership (CPTPP), which seek to counter China’s influence on the global economy, it is difficult to assess the initiative’s substantive effects at this time.  Still, this disengagement is likely to slow down economic growth, raise the cost of making things, and make prices go up for everyone. Canada seems less assertive than the other Five-Eye nations because it broke away from China. *The reduction in exports during the first quarter of this year was mostly attributable to a decline in demand from China, driven by new supply chain lockdowns and price rises.  However, according to the logistics data, Canada’s shipping to China economy surged in June as manufacturing and commercial operations restarted.* But the data shows that China bought a lot more and shipped more freight from Canada in June after factories and businesses started up again. As a result of the resolution of Huawei conflict, there is a possibility that Canada-China shipping will return to normal in the future, as both countries appear more open to a conversation on trade and other issues. In response to the United States’ Indo-Pacific Economic Framework (IPEF), some have advocated for more constructive cooperation with China to mitigate global concerns such as climate change and advance the economic interests of Canadian stakeholders in Canada’s own Indo-Pacific strategy.  In addition, China is likely to miss its growth target due to the dismal economic performance in the first half of 2022, and commodity prices continue to rise. This could mean that trade with its most important trading partners, especially Canada, will pick up quickly. Even though the major political stalemate pressuring concerns to ship from China to Canada seems to be over, there are still problems with the two countries’ business relationships. In the last months of the year 2022, trade tensions have been observed. The worsening attitude of the Canadian public toward China and the hardening attitude toward trade and shipping between Canada and China are even bigger problems. ( U.S. Blacklists 5 Chinese firms for allegedly Helping Russia’s Military) The public and political and economic leaders may require some time to recover confidence. In the meantime, it would be in the best interests moving both nations to find common ground in order to calculate freight or toward expanding our North pacific shipping trade.