Complementarity And Prospect Of Sino-Canadian Trade Relations Outlook

Since China and Canada started formal trading relationship in1961, the bilateraltrading relationship has developed steadily during the past two or three decades, andin2011China has become Canada’s second largest trade partner, third largest exportmarket and second largest import country, while Canada has become China’sthirteenth largest trade partner.Further more, the trading structure between the two sides has been optimized. FromChina’s prospect, the main export goods have been changed from primary products toindustrial products represented by machinery and transportation equipments.Meanwhile, the structure of Canada’s export to China has also been optimized. Thehigh-tech products and natural resources have taken the largest share rather thanwheat.Using the indexes of trade connection, revealed comparative advantage and tradecomplementarities based on the data over the year2001-2011, this paper analyses thestructure of Sino-Canadian bilateral trade. The results indicate that there areremarkable differences of comparative advantage of the two countries, whereas thetrade complementarities seem to be significant both in inter-industry trade andintra-industry trade.In the following part, the paper analyses the reasons for the bilateral tradecomplementation according to the Comparative Advantage Theory and theIntra-Industry Trade Theory, including the differences of resources, industrialstructure and consumers’ need.However, there are some problems facing the two parties of the bilateral trade, suchas trade imbalance, trade barriers and trade frictions, challenges from other countriesand regions etc.In the last part, this paper further investigates the factors that influent the bilateraltrade between China and Canada from the aspects of politics, economy and culture.Then it sums up the trends: energy will be the key cooperative area; bilateral tradingvolume will be further enlarged while the trade structure is being optimized; the strategic status of the bilateral trade relationship in each party’s economicdevelopment will become more and more important in the future.