BEIJING, China — Gov. Gen. Ray Hnatyshyn offered “unconditional” most-favored-nation trading status to China during his state visit here last week while federal agriculture minister Ralph Goodale was dealing with Chinese minister of agriculture Liu Ziang and vice minister of internal trade Bai Meiging.
Through his whirlwind two-day schedule in Beijing, Goodale repeatedly emphasized Canada’s long-standing commercial ties to the People’s Republic of China as the basis for doing more business. Two-way trade between Canada, with a population of 27 million, and China, with a population of 1.18 billion, now tops $5 billion.
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More potential possible
“There is room for more growth,” Goodale told a luncheon at the Canadian Embassy, attended by Ziang, Meiging and others in the Chinese agricultural community.
The luncheon was held in the Alvin Hamilton room, named after Canada’s federal minister of agriculture who secured the first big sale of Canadian wheat to China in 1961 during the depths of the Cold War.
Goodale came back to that historic sale often in his speeches and press conferences throughout China. He also mentioned the establishment of the Canadian embassy in 1970 and Canada’s support of China’s bid to join the United Nations Security Council.
“Our record shows we are not here for short-term gain,” Goodale said during his speech. “We hope to build on the friendships and partnerships already in place.”
One potential partnership exists as Canadian companies bid for a piece of the $1.35 billion loan made to China to upgrade its grain handling facilities. The project will allow China to move grain in bulk, rather than bagging and re-bagging as is the current practice.
The World Bank is putting up nearly $700 million while Beijing and various state governments will provide the rest. The design phase of the project is all but complete and bidding has started on the construction phase.
Losses put into perspective
Goodale reminded the Chinese repeatedly that losses through the Canadian grain handling system every year are less than one percent of production. The World Bank estimates annual Chinese losses from production areas to consumers are about six percent.
Goodale also urged China to regard Canada as its priority supplier of wheat, and Canada would likewise regard China as its priority market.
While a recent estimate from the International Wheat Council showed China’s wheat import needs could be as high as 20 million tonnes by the turn of the century — based on a population growth of about 15 million people every year — Chinese imports scarcely broke six million tonnes last year.
Canada’s share of that market was healthy at about 46 percent or 2.7 million tonnes, but it’s a far cry from the days when prairie farmers sold six, seven or even eight million tonnes of milling wheat to China.
This past year, for instance, Brazil has been the wheat board’s best customer for milling wheat while South Korea has been eager to buy Canada’s surplus feed wheat.
Always a market
Chinese officials say they will always need to buy milling wheat since most of what’s produced in Shandong, China’s top wheat province, is soft red winter wheat. The Chinese are adept value buyers, picking up cheap French wheat and American wheat with the help of export subsidies.
Even though Chinese officials told Goodale and the Canadian Wheat Board they would rather buy quality wheat from Canada, they also hinted that the quality was not worth Canada’s expensive price.
