The Impact on Canada of the Rise of the Chinese Economy: Good, Bad or Indifferent? (Working Paper 50)
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Authors
Drummond, Don
Clemens, Kyle
Date
2014-12
Type
working paper
Language
en
Keyword
Foreign Economic Relations , International Economic Relations , China , Canada
Alternative Title
Abstract
From humble beginnings less than twenty years ago, the economic relationship between Canada and the Chinese has flourished so
that China is now Canada’s second most important trading partner after the United States. The Chinese demand for Canada’s
exports, in particular in the natural resource sectors, has been a clear win for Canada, especially during the recent Great
Recession where demand from other countries dropped sharply. But other aspects of the relationship have led to suggestions of
costs. Canada’s large trade deficit with China at least looks superficially as a drag on the Canadian economy. It has been
suggested the greater exposure to a low cost producer has displaced Canadian production and jobs and lowered wages. We find
that each argument for costs to the relationship ignores important factors. On balance we conclude the relationship has been good
for Canada, and it could be even better in the future.