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Outline of opportunities in China

An overview of Canada's second-largest trading partner

China is the world's second-largest economy with a gross domestic product (GDP) of US$12.2 trillion (2018), representing approximately 15.0 % of the global economy. As the world's second-largest importer of agri-food and seafood products (considering the EU28 as a single market), China remains one of Canada's most influential global trading partners for agri-food and seafood products. Moreover, China's population of over 1.4 billion citizens makes it a substantial market for Canadian export businesses.

Major sector opportunities in China

Discover more information, strengths, opportunities and considerations for Canadian agri-food and seafood. Read our Asian agri-food market intelligence!

Are you interested in learning about how we select priority sectors?

Sectors were prioritized using a quantitative modeling approach. Using the Global Trade Tracker database, we focused on over 100 products which represented, in 2018, 75% of China's total imports from the world (excluding the products that Canada does not have the capacity to produce), and 99% of Canada's exports to China.

In phase one of the modelling approach, all agri-food and seafood products went through a quantitative assessment, where each product was evaluated based on a series of quantitative criteria (that is, size of market, market growth, Canada's trade intensity, and tariff reductions), all of which were ranked over ten years of historical trade data.

Our analysis focused on assessing opportunities from a strengths and challenges perspective:

  1. Strengths were defined by high performance in large Chinese import sectors, and high growth.
  2. Challenges were defined by the issues that industry might face while trying to take advantage of market opportunities.

In phase two, the products were further categorized into nineteen super sectors and were assessed by Agriculture and Agri-Food Canada (AAFC) and ten provincial experts through a survey. The experts assessed the opportunities and identified the challenges that may remain.

All priority agri-food and seafood products are both imported by China and within Canada's capacity to produce and supply internationally.

Growth through processing

As of 2018, Canada supplied Can$3.55 billion in processed foods to China, a figure that has been growing by 22.3% annually since 2014. High performing products include canola products, pork, cold water shrimp, and frozen crab. While China is one of the leading markets for commodity exports, it is one of the few markets in the world where Canada can grow exports of processed products, given its wealth and rapidly growing economy.

Processed food exports provide an income multiplier; exporters can compete in a growth environment, which is less sensitive to market share and price point. Margins tend to be higher for processed products. Exporting these products also tends to be less volatile than commodities would be.

Processed foods currently represent 34.5% of all Canadian agri-food and seafood exports shipped to China.

It is in Canada's interest to position differentiated, high-value, unique and niche products. The Chinese market offers an opportunity for Canadian exporters to position products that consumers identify with Canada, such as bison meat, cranberries, blueberries, ice wine, wild rice, lobster, and maple products. Canadian businesses can take advantage of Canada's brand and positive image to enhance their product offerings to the Chinese market.

Canadian processed food exports to China 2018
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  • Canola oil: 33.1%
  • Oil cake: 15.3%
  • Frozen pork: 10.0%
  • Frozen cold water shrimps: 6.1%
  • Frozen crabs: 5.4%
  • Bovines / equine hides: 4.1%

Source: Global Trade Tracker 2019

Canada has a significant comparative advantage in the production of many high quality commodities in the grains and oilseed sectors as well as other areas such as pulses. While the Chinese market has been very responsive to those Canadian products often sold in bulk, there are also opportunities to extend the value of our quality commodities by identifying ingredient opportunities in high-end processed food products, particularly those in the health and wellness industries, such as pea powder as a gluten-free and high protein substitute for certain flours, especially for consumers with celiac disease.

Canada's competition

As of 2018, Canada had a market share of 5.7% of the Chinese agri-food and seafood market. Products where Canada has a strong presence in the processed food sector have been able to maintain a strong market presence because competitors are more focused on products where Canada has less interest. There is, however, strong competition in beef products, baby food, wine, and various oilseed products.

Canada's competition in China for imported processed food products in 2018
Country Percent of total Chinese processed food imports Top three processed food exports (% share of country's processed food exports)
New Zealand 9.93% Milk and cream (24.5%), baby foods (14.4%), frozen cuts of sheep (11.6%)
United States 8.03% Bovine hides (12.2%), food preparations (11.6%), hay (7.3%)
Australia 7.13% Frozen beef (16.9%), Wine (15.4%), food preparations (13.9%)
Indonesia 6.85% Palm oil (50.6%), palm kernel (13.4%), edible oils (6.8%)
France 5.51% Spirits obtained by distilling wine (29.2%), wine (28.0%), baby food (9.9%)

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Market access

China has strict import requirements for many products and Canadian exporters are responsible for determining these import conditions by working with their Chinese importer. However, the Market Access Secretariat (MAS) of Agriculture and Agri-Food Canada is also available to assist in providing export-related information and support. This service offers a single point of contact with the goal of helping the Canadian food industry and businesses reach international markets. If you have questions about exporting your agriculture or food products, or are looking for support please contact the Market Access Secretariat at aafc.mas-sam.aac@canada.ca.

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