Export economist predicts China to surpass U.S. as B.C.’s top timber market

Business

Canada’s key export-support organization boldly predicts China will surpass the United States as British Columbia’s top market for forest products within 12 years, if long-term trends hold.

“This is really about differential growth in the markets,” said Peter Hall, chief economist for Export Development Canada. “China has long and strong potential growth and the U.S. is a fully developed economy.”

That projection appears to counter a short-term decline in lumber sales to China following the country’s meteoric rise in imports over the last 15 years.

After years of a provincial hard-sell in the country, China emerged as a major customer for B.C. forestry exports following the 2008 global recession, surpassing Japan as the province’s No. 2 market for lumber in 2009.

By volume, B.C.’s exports to China peaked in 2013 when timber companies sold 7.9 million cubic metres worth of processed wood to Chinese buyers, versus 13.6 million cubic metres to buyers in the U.S. market.

However, while lumber exports to the U.S. increased to 17.9 million cubic metres in 2016, exports to China slipped to 5.9 million cubic metres over the same period.

B.C.’s total exports of lumber shrank by nine per cent in 2017, a year plagued by forest fires in the province’s interior and the challenge of shrinking timber supplies in the aftermath of the mountain-pine-beetle infestation.

However, by taking exports of raw logs, pulp and paper into account, the value of shipments to China have continued to climb.

Raw log shipments to China in particular, by value, have risen 43 per cent over the past three years hitting $479 million in 2017. Log exports to the U.S. over the same period shrank 33 per cent to just $44-million worth of unprocessed timber in 2017.

Hall said there is no consensus among economists about Canada’s prospects for boosting exports to Asia.

In October, after the three parties concluding the U.S. Mexico Canada Agreement to re-write NAFTA, prominent University of Calgary Economist Jack Mintz argued that diversifying trade from the dominant U.S. market would be difficult.

Mintz wrote that Canada sold to the U.S. three-quarters of the $545 billion in goods and $110 million in services that it exported in 2017.

“Our next-largest export markets are fractions of that,” Mintz said, with China at No. 2 buying just 4.3 per cent of all Canada’s exports.

Hall, however, said he is in the camp of economists who believe Canada is in a position to make significant increases in trade with China, not …read more

Source:: Vancouver Sun – Business

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