China and Canada Trade on Services: Outline (Essay Sample)

China and Canada Trade on Services: Outline
China and Canada Trade on Services
Tourism
Transportation
Construction
Summary
1.0 China and Canada Trade in Services
China and Canada are highly diversified economies. Their diversity gives them enough agility to overcome many economic challenges that characterize many modern economies today. The service sector is a key pillar of these economies, in this regard, because it supports traditional economic sectors, such as the manufacturing sector. Its contribution extrapolates to the wider global economy because the world economy is increasingly knowledge-reliant global and more dependent on service-oriented businesses. Canada and China have realized this fact and are strengthening their cooperation through increased engagement in bilateral relations (The Canadian-Chinese Economic Partnership Working Group 5). By analyzing the tourism, transportation and construction sectors, this paper describes these bilateral relations and underscores the need for both countries to increase their cooperation in the service sector.
2.0 Tourism
Globally, people are aware of China’s huge tourism potential because of its strong economy and high population. Indeed, it is unsurprising that China is among the biggest tourist spending markets in the world (Ligaya 1). In fact, experts say Chinese tourists spent more than $100 billion in tourism, annually (Ligaya 1). Canada has been a beneficiary of China’s tourist potential because the Asian economy is a key source market for its tourism industry. In fact, between 2011 and 2012, the North American economy reported a 44% increase in tourist numbers from China (Ligaya 1). Detailed statistics show that in 2012, Canada received about 288,000 Chinese tourists (Canadian Tourism Commission 1). Comparatively, in 2011, this figure was 160,000 (Canadian Tourism Commission 1). This huge increase stems from Canada’s validation as an Approved Destination Status (ADS) by the Chinese government. Since 2009, after this approval, Chinese tourists have found it easy to travel to the North American country. Easy visa approval processes and the introduction of new airline carriers between China and Canada have also contributed to the increased tourist numbers from China to Canada. Ligaya (1) believes that Canada’s marketing efforts, in Asia, have also contributed to this outcome. They have yielded positive outcomes. For example, the CTC (1) estimates that Chinese tourists inject about $480 million in the Canadian economy. Although this figure is impressive, Ligaya (1) believes that Canada is not doing enough to attract more tourists from China. Experts estimate that the Chinese tourist market has the potential to increase its spending, in Canada, to about $800 million, in 2015 (CTC 1). Canada hopes to capitalize on this potential by increasing its tourism marketing funding to match its competitors, such as the United States (US) and Australia (Ligaya 1).
3.0 Transportation
The transportation industry plays a critical role in supporting the growth and sustainability of the Chinese and Canadian economies. China and Canada share several trade agreements in this sector. For example, Canada expanded its air transport agreements with China in 2011 (Transport Canada 2). In the same spirit, the two countries are engaged in new negotiations to deepen their partnership in other sectors of the transport industry. Currently, the two countries have existing trade arrangements that ease cargo movements between both destinations. On the Chinese side, the China Southern Airline operates several freight services between the two countries (Transport Canada 2). On the Canadian side, Canadian airlines fly to Shanghai, at least three times a week, to transport cargo (Transport Canada 2).
Besides collaborations in the aviation sector, Canada is also a key gateway export market for Chinese companies (Christopher 7). Particularly, Canada plays an instrumental role in this regard by allowing US-bound exports from China to pass through its ports. In turn, the Chinese and Canadian governments have signed several trade agreements that aim to improve the efficiency of Canada’s transport network. For example, the railway sector is undergoing improved efficiency and capacity improvements through co-production agreements signed by both governments (Christopher 7). Both countries also profit from capital, commercial and technological exchanges that have seen Canada’s transport companies announce huge investments in road, rail, and seaport expansions (Christopher 7).
The Canadian-Chinese Economic Partnership Working Group (1) says there is a huge potential to increase the trade relations between both countries because China needs safer and inexpensive transportation networks and Canada has the expertise to build such infrastructural networks. Furthermore, the North American nation is a leader in global best practices in some service sectors, such as aerospace technology (Christopher 7). China could benefit from such competencies. There is also a huge potential for both countries to collaborate by undertaking similar infrastructure projects in overseas countries.
4.0 Construction
Most of the trade relations between Canada and China in the construction industry have occurred through the exchange of raw materials and finished products. However, their relations have recently transcended this scope and now include the exchange of intangible products (services). Most of these exchanges have occurred through technology transfers and labor movements. Here, Canada has had an upper hand because it has advanced technologies and construction expertise (Christopher 8). Although Canada is a leader in best practice adoption in the construction industry, it shares a mutual relationship with China because Canada also benefits from the influx of Chinese workers in the Canadian construction industry. For example, Gillespie (8) estimates that the Canadian construction industry requires about 320,000 new workers in the next six years. Since China can offer cheap labor, it stands a good chance of benefiting from this employment opportunity.
Besides human capital, China and Canada can benefit from financial benefits in the construction industry. Already, some Chinese banks have expressed interest in funding major construction projects in Canada (Gillespie 8). A...