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magazine / ma06
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March/April 2006 issue |
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EDITOR’S NOTEBOOK
Freight train coming on
I bought a ring recently as a gift for my daughter, and it came in the cutest
little box. Cleverly hinged on both sides, it had a button-snap closure and elegant
detailing. The craftsman who made the ring told me that he used to buy his jewellery
boxes from a firm in Ontario and that they cost him about $4 apiece. Now they
arrive from China for the bargain price, including delivery, of about $1.60.
A friend in Alberta tells me his local farm-supply store now sells steel farm
gates and cattle chutes that are made in China and shipped to the Prairies for
less than a quarter of what it costs for local manufacturers to cut and weld
the steel.
And, in January, at the annual North American International Auto Show in Detroit,
new cars from China were on display for the first time ever. Price tag: about
$10,000 for a compact sedan. By the end of this decade, Geely Automobile Company
of Hangzhou expects to sell 100,000 of them a year in North America.
China’s muscular economic growth is hardly breaking news. What most of us still
have not grasped, though, is the extent to which it is rippling across the economic
geography of Canada.
Our story in this issue about the string of train derailments in Western Canada
last year is one of those ripples. Canada’s two major railways are busy and profitable.
Canadian Pacific Railway (CPR) is expanding its tracks from the Prairies to Vancouver.
Canadian National Railway (CN) is investing in a new container terminal at Prince
Rupert, B.C., and is increasing the clearances of its tunnels and bridges in
the province to allow for the transport of flatcars with double-stacked containers.
As Christopher Jones of the Railway Association of Canada notes in a recent essay,
Prince Rupert is the closest North American port to China and therefore offers
importers the quickest route to the busy markets in Chicago.
Natural resources are pouring out of Canada to China by rail and ship, everything
from oil and coal to sulphur, logs, potash and ores. Most of it is exported unprocessed
and unrefined. In return, shiploads of consumer goods are flowing in from China,
everything from ring boxes to electronics and, soon enough, cars. All of it is
manufactured, processed and finished.
In 2003, China became Canada’s second largest trading partner. (The United
States is still first.) And if China continues to grow at its current, blistering
pace, all of this is just the beginning.
Canada’s prosperity has always depended on exports. What’s particularly pronounced
about the China trade is that the Chinese want logs not lumber, crude not refined
oil, ore not steel. All importers want to process their own goods, but China
has huge pools of low-paid workers — many toiling in oppressive conditions — and
massive purchasing power for commodities. Its trading partners are rarely willing
to risk the loss of big sales of raw resources by insisting on some degree of
processing.
And here’s where the most profound difference between our political systems
and cultures lies. Chinese leaders think and negotiate in 10-to-100-year time
frames. Canadian politicians can’t see beyond the four-year electoral horizon.
Year one after an election is devoted to investigation and planning, year two
to implementation, year three to assessing results and making adjustments, and
year four is a time to play it safe and prepare for the next election. It’s tough
to negotiate with partners who either get the deal they want or wait you out.
What does this have to do with geography? Exporting natural resources tends
to create jobs in small towns, where, heaven knows, they are needed. But it also
means fewer jobs in mills, refineries and factories. The China trade is reshaping
the economic geography of Canada. Maybe it doesn’t matter that we don’t make
jewellery boxes or farm gates. Cars, well, that might be a different matter,
one that at least some politicians might get excited about.
— Rick Boychuk
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