In an effort to develop closer trade ties with China, Canadian Prime Minister Stephen Harper met with Chinese Prime Minister Wen Jiabao in Beijing last week. Canada’s goal is to continue to increase its trade with China in hopes of decreasing its reliance on trade with the United States. This goal especially relates to the oil industry and Canada’s effort to overcome the increasing environmental regulations being imposed by the United States. Canada sees China as a solid alternative for trade because of its vast market size and high demand for foreign oil.
Mr. Harper summed up Canada’s quest for alternative markets in a meeting with Wen Jiabao when he said, “Diversifying our markets is a key priority for Canada and we look forward to expanding our cooperation in many important areas including energy, natural resources, tourism and education.” Mr. Wen responded by saying that China is “ready to expand imports of energy and resource products.” This expansion of energy imports by China is likely the result of rising uncertainty in the supply of oil that is usually imported from traditional oil exporting countries in the Middle East.
Following the meeting, both countries said that they had completed negotiations on a new series of regulations that would make it easier and more attractive for Canadian companies to invest in China. At this time specific details are unknown, but it is understood that, among other things, these new regulations will aim to shelter Canadian companies from discriminatory regulations. One common question being raised is how such regulations will be enforced at the local level because often times this is where foreign companies suffer the most discrimination.
Statistics from 2010 show a large percentage increase in Canadian investments in China and vice versa. Because of the latest meeting in Beijing and the resulting agreements, these percentages will likely further increase in the near future.