The sky seems to be the limit when it comes to export expansion into China.
Between 2009 and 2011, exports to the world’s remaining Communist superpower have nearly doubled to $4.9 billion in 2011, and trade with the People’s Republic continues to rise this year, jumping 22.6% in the first four months of 2012.
But even though China has become B.C.’s second largest trading partner, it has a long way to go to come close to matching America’s share of the province’s exports.
The U.S. still demands more than 42% of the province’s exports, and arguably it couldn’t take a lot for America’s share to grow near 50% again. While the subprime mortgage crisis crippled the U.S. housing sector and took B.C.’s lumber exports with it, the housing market appears to finally be bottoming out after half a decade of declines.
Export data has shown that much of the decline in U.S.-bound exports was primarily due to the drop in forestry-related exports. While lumber exports have remained less than 50% of their total prior to the financial crisis, they appear to be improving so far this year, rising 10.8% in the first four months of the year.
Despite forestry’s struggles, many other export sectors have remained resilient in the face of the financial crisis and subsequent recession. U.S. exports of agriculture products, fish, fabricated metal products, chemicals and machinery have all remained fairly stable and some have even seen increased exports over the past few years.
While there is opportunity to expand exports to China and other Asian countries, not every sector will necessarily see value from such a focus. Given the limits on the amount of food, fish and machinery that can be produced in B.C., for example, an untargeted plan to boost Asian trade could simply result in a geographic redistribution of exports rather than an absolute increase.
The significant investments in time, relationship building and acclimation to local business practices might not be worth it. •
