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China and Canada Cozy Up as US-Canada Relations Grow Strained

The United States may have frozen Canada out of the North American Free Trade Agreement for the moment as it settled a deal with Mexico Monday, but the country doesn’t have all of its eggs in the U.S. basket.

One focus for the United States’ northern neighbor, when it comes to apparel and textiles in particular, has been further nurturing relations with other key trading partners, like China.

At Canada’s Apparel Textile Sourcing show last week, a faction of Chinese leaders spoke about the future—and evolution of—China’s apparel sector, plus the country’s commitment to free trade with Canada.

In terms of trade, China and Canada have witnessed “a good momentum of growth” of late, according to Lu Shaye, Ambassador at the Embassy of the People’s Republic of China to Canada, which Sourcing Journal reported via Facebook Live. In the past decade, Lu said bilateral apparel and textiles trade between China and Canada now accounts for 8 percent to 9 percent of China’s total trade balance.

“With the increase of Chinese consumers’ capacity, I think the Canadian brands will find huge attention to tap in the Chinese market,” Lu said through the aid of a translator.

Opportunity persists in China, despite the fact that its market share in the apparel and textiles sector has continued to slide, particularly in the last two years. But there’s a reason for the slide, according to Cao Jiachang, chairman of the China Chamber of Commerce for Import & Export of Textiles.

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“Chinese companies are changing their exporting strategy and changing their portfolio to exporting to the global market,” Cao said.

To diversify its role, and continue to make sure Chinese-owned factories can still get product into countries where trade relations have grown strained, like the U.S., China has been investing in manufacturing in places like Vietnam, Myanmar and Ethiopia—and those types of investments are only expected to continue, expanding China’s reach as a manufacturer, whether directly or indirectly.

“Chinese investment in foreign countries will bring a win-win solution for all involved,” Lu said.

Canada and China are currently working on a free trade agreement that’s been seemingly more productive than any of its conversations with the United States.

“Generally speaking, the process of the China-Canada FTA is quite smooth,” Lu said. “We have conducted four rounds of exploratory discussions.”

The Chinese government, according to Lu, has taken a positive position in terms of promoting the FTA negotiations with Canada, and with joint efforts Lu expects a mutually beneficial trade deal will come to fruition.

Seconding the sentiment, Cao said, “We have great faith in the future for a great perspective between China and the Canadian market.”

The outlook for relations between the two nations appears bright.

Continuing, Lu said, “China is a huge market with 1.4 billion population and there is an increase with Chinese consumers…China has been many years the second largest trade partner of Canada, and though we have a great distance to overpass the first trade partner for Canada, that is the USA, it also shows we have great potential to Canada.”