Agricultural Demand: It’s Not A Two-Way Street With China

Earlier in May, I had a double-edged challenge, how to I plant soybeans and replant corn all at the same time? Sometimes things happen that way. I know there are many of you who plant corn and soybeans at the same time, but I farm alone, so that paradigm is a bit of a challenge. Needless to say, I spent considerable time on a no till drill going across a few corn fields. After 3 inches of rain, I was just trying to give that corn a better chance. At the end of the day, my corn made it through.

Hopefully my corn will have a better outcome than what Huwaei executive Meng Wanzhou had in late May. While I was running over my corn fields, a BC court was getting set whether to let Meng Wanzhou go or kick the can down the legal road some more. There was lots of focus on this especially with two Canadians languishing in Chinese jails. Of course, there also is the reality that Canada is caught between two superpowers, the US and China, never a good place to be. The BC court decided against Meng Wanzhou, which keep her under arrest for the foreseeable future. Honouring an American extradition request has certainly cost Canada a lot of angst.

There are issues here for farmers. When Meng Wanzhou was first arrested China stopped buying canola and later Canadian pork. Some of this was later rescinded, but nobody in Canadian farm country really likes the fact, that Canada has found itself in the middle of an argument between the United States and China. My twitter feed lit up after the ruling, telling me farmers were tired of the last 3 years of trade wars and the political machinations surrounding Meng Wanzhou. Kicking one of your best potential customers in the shins over and over on this case continues to rankle. However, it’s a very complicated business.

It is easy to criticize any event or any move by government which hurts China. Keep in mind, they used to buy 1 out of 3 American soybeans and with a population of 1.3 billion people continue to be the growth economy for our agricultural commodities. However, not everybody agrees, especially many people in the non-farm economy, who look at China much differently. For instance, Huwaei is looked at as a security threat by American politicians and their technology has been outlawed by many western countries, citing security concerns. There is also the ongoing detention of Uighurs in western China as well as the memory of Tiananmen Square and the list goes on. It’s a mixed bag with human rights and because China is so huge, nobody wants to look the other way. That’s one reason, there are so many issues with China despite their appetite for agricultural commodities.

To make matters a little more complicated there is Hong Kong. Ceded to China in 1997 by the British, with a 50-year agreement to maintain democracy, things are starting to unravel. Beijing new security law for Hong Kong is intended to go against those who undermine Beijing authority. However, its seen as a threat to many there and the American administration is weighing in. The Trump administration last week moved to revoke Hong Kong’s special diplomatic and special trading relationship because it was no longer independent of Beijing control.

Simply put, it’s getting difficult. The Americans who are our largest trading partner are raising the temperature on China and the BC judge last month in Vancouver doubled down. It leaves Canada in a bad spot and Canadian farmers who rely on that potential big Chinese market in a quandary too. Can’t we just get along?

I wish it was so easy. The preceding views in this column are not necessarily so shareable in the rest of the world, specifically Asia. For instance, as I’ve said many times in this column, the view from Asia is different. I have felt that on the streets of Bangladesh. In fact, not only have I not only felt it, I’ve seen it, as Asian countries take advantage of the big nearby Chinese economy. All of the bad things here seen about China, don’t look so bad other places. If fact, often, many of those same things are tossed back at western countries from Asia. The world is such a diverse place.

As we move ahead, I’m hoping for better things. I want my corn to see a better day and so do I for Canadian agriculture. My corn needs some luck, and maybe we do on the trade front too. China will remain a very important player in our agricultural commodity demand. Clearly though, it’s not necessarily a two-way street. They don’t need us like we kind of need them and Meng Wanzhou is in the way. The courts have ensured that for the foreseeable future. That can just keeps getting kicked down the road.