Mention the word “China” and all too frequently we think of how much Canada imports from China.

Given that the total value of Chinese goods Canada purchases is almost five times what it exports, this view is not that surprising. What is surprising, however, is the fact that over the past four years, from 2002 to 2006, Canada’s exports to China have doubled.

So far this year, exports are up 37.6% compared to the same period in 2006, while Canada’s imports from China are up by 14.8% year to date.

The rapid growth of Canada’s exports to China over the past four years was highlighted in a recent Statistic’s Canada article titled “Trading with a Giant: An Update on Canada-China Trade.” Based on the research of the article’s author, Diana Wyman, Canada now exports almost as much to China as it does to Japan. Shortly after the article was written, Canada’s exports to China exceeded those to Japan, based on September data.

Key Driver has been China’s Appetite for Commodities
The key driver of Canada’s rapid increase in exports has been the dramatic growth in China’s appetite for commodities. That appetite has tripled metal prices and quadrupled crude prices over the past five years.

Over the past four years, strong Chinese demand for Canadian resources has tripled shipments of industrial goods and materials, e.g., metals, fertilizers and chemicals. It has also boosted exports of wood products, agricultural products and machinery. The strength of shipments to China and several European countries means that Canada’s non-U.S. exports have increased by almost 70% since 2002. As a result, the U.S. share of Canadian exports has declined from 84% to 77% in September.

Ontario has been Helped Most by Diversification of Trade
Regionally, while all provinces have shared in this diversification of trade, strong growth of nickel, gold, uranium and aircraft pushed Ontario’s exports to non-U.S. destinations up more than any other province. Over the near term, this development should help to moderate the negative impact that slower growth in the U.S and the recent rapid appreciation of the Canadian dollar versus the U.S. dollar will have on the province.

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