On June 16, China announced that pests were found in logs imported from Canada. This news triggered concerns in the Canadian industry: whether China is threatening its timber exports in response to the adverse ruling made by the Canadian BC Supreme Court against Huawei executive Meng Wanzhou.
According to the Canadian news outlet, The Globe and Mail, Chinese Foreign Ministry spokesman Zhao Lijian (in the photo above) said in Beijing on Tuesday that customs officials found longhorn beetles and bark beetles (two kinds of beetles that harm trees) on logs imported from Canada. China has notified the Canadian side of this situation in a timely manner, and asked the Canadian side to investigate the cause and take improvement measures. He also said: “In order to prevent the introduction of these pests, China has processed these logs in accordance with China’s relevant quarantine laws and regulations”, and these are “normal quarantine security” precautions.
Although China has not made more negative statements, this news has caused concerns in the Canadian timber industry, fearing that China will suppress its timber exports. Two major timber industry giants in the country, Canadian Forestry (Canfor Corp.) and Mosaic Forest Management Corp. (Mosaic Forest Management Corp.), all expressed concern. They worry that Beijing is merely issuing export threats or is preparing to take further actions, such as restricting the import of timber from Canada.
Coincidentally, the President of the Canadian Chamber of Commerce, Perrin Beatty, also admitted to The Globe and Mail that he is worried that China may use trade issues to advance its political goals. The “political purpose” that Beatty said is what the Chinese government has always asked Canada to release Huawei executive Meng Wanzhou. In December 2018, Canada responded to the US extradition request. After Vancouver arrested Meng Wanzhou, China soon blocked the import of Canadian rapeseed and some meat products (later relaxed). Although China has never made it clear that they have anything to do with Meng Wanzhou’s detention, Canada understands that the Chinese are exerting pressure.
Just at the end of last month, the Supreme Court of BC made an unfavorable ruling against Meng Wanzhou. It is difficult to say whether China is continuing to threaten Canada this time through “wood has insects”.
Beatty went on to say that the “softwood lumber dispute” between Canada and the United States is pending. China’s economy has been badly hit by the coronavirus, and now wood exporters are trying to restore their vitality, so they need to expand exports and enter foreign markets as much as possible without restrictions, so if China “politicizes” the pest problem, more problems for exporters will be caused.
“As far as we (Canadian Chamber of Commerce) know, there are no pest-control problems in the country’s timber export industry,” Beatty said. “We will pay close attention to developments and wait for the Canadian government to make a statement to respond to the Chinese side.”. In addition, taking into account the current difficulties faced by the country’s timber exports, Beatty also called on the country’s forestry companies to open up for more buyers.
On the other hand, Mary Ng, a spokesman for the Canadian Minister of International Trade, said that the federal government is investigating complaints from China. “On June 9, 2020, Canada received 16 notifications from China regarding violations found in imported Canadian logs, and Canada is investigating these notifications in accordance with standard response procedures,” she revealed, ” At present, this dispute has not disturbed the country’s (timber) exports.” Ms. Susan Yurkovich, chairman of BC’s Timber Trade Commission, said that three of China’s violation notices were related to BC’s timber exports. The rest involves shipments from other parts of Canada. In fact, it is not uncommon to find pests in exported timber, but China has sent 16 violation notices at once, which is somewhat unusual. She said she hopes that Canada will work with China to solve these problems. “Although I know that Canada and China have tensions on certain political issues, we still maintain a strong business relationship and hope this relationship will continue.”
Canadian timber exports account for a large proportion of the country’s foreign trade. The largest customer is the United States, but China’s purchase volume should not be underestimated. In recent years, China has been an enthusiastic buyer of Canadian logs. Taking 2019 as an example, more than 60% of the wood exported to China is raw wood, with a total value exceeding 383 million yuan (US$ 54.1 million). Statistics from the Canadian wood industry association (Canada Wood) show that China’s imports of Canadian wood products have increased every year since 2015, but there have been signs of weakness this year. In the first quarter they fell by 12.6%.