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British Columbia is a small, open economy that is increasingly integrated with North American and global markets. This paper examines B.C.`s setting in a global context and explores some of the related challenges and opportunities.
Although the province is a sub-national jurisdiction, B.C. is the 57th largest economy in the world, which places it in the top 30 per cent of all countries. Given this ranking, it makes sense to talk about B.C. as a significant-sized economy in a global context, but it is also instructive to remember that it accounts for just one per cent of all economic activity in North America.
A brief review of the province`s economic record finds that B.C. outperformed Canada over the past five years, but that over the past decade its average growth was slightly below that of Canada. In terms of industrial structure, resources are still critical to B.C.`s exports and overall prosperity, but the province is not a resource-dependent jurisdiction; it is fairly diversified and comparable to most other developed economies. A notable feature of the recent boom, however, is the large role played by the highly cyclical construction and real estate sectors.
The paper highlights three important linkages: trade, investment and the workforce.
Amid the rapid growth of global trade, B.C.`s imports and exports have grown quickly over the past quarter century. Despite this, a weak spot for the province is that it is less trade-intensive than other parts of Canada and has developed a sizable structural trade deficit.
With the still dominant role of resources in its export base, the province is probably not as engaged in global supply chains as other parts of Canada. Most B.C. exports are intermediate inputs in other markets, while imported goods appear to be mainly finished products acquired by local consumers and businesses. This trade structure reduces the potential for productivity improvements and cost reductions associated with purchasing intermediate foreign inputs.
On the other hand, this trade structure means that B.C.`s exports are less import dependent than exports from most other provinces. The advantage is that more inputs are sourced locally, which creates more value-added within the province. The disadvantage of having limited imports inputs in the local production process is that it leaves B.C.`s key export sectors somewhat more exposed to currency fluctuations.
Not surprisingly, the United States remains B.C.`s largest export market, followed by Japan and China. The share of exports destined for the U.S., however, has dwindled over the years in step with the rise of China and other Asian economies. Recently, the fall-off in exports to the U.S. reflects a dramatic decline in lumber exports stemming from the collapse in U.S. home construction. Still, the growing trade relationship with Asia, coupled with Asia`s increasing presence in the global economy, suggests that B.C. has much to gain from Asia Pacific trade initiatives.
Read the full article here.
Although the province is a sub-national jurisdiction, B.C. is the 57th largest economy in the world, which places it in the top 30 per cent of all countries. Given this ranking, it makes sense to talk about B.C. as a significant-sized economy in a global context, but it is also instructive to remember that it accounts for just one per cent of all economic activity in North America.
A brief review of the province`s economic record finds that B.C. outperformed Canada over the past five years, but that over the past decade its average growth was slightly below that of Canada. In terms of industrial structure, resources are still critical to B.C.`s exports and overall prosperity, but the province is not a resource-dependent jurisdiction; it is fairly diversified and comparable to most other developed economies. A notable feature of the recent boom, however, is the large role played by the highly cyclical construction and real estate sectors.
The paper highlights three important linkages: trade, investment and the workforce.
Amid the rapid growth of global trade, B.C.`s imports and exports have grown quickly over the past quarter century. Despite this, a weak spot for the province is that it is less trade-intensive than other parts of Canada and has developed a sizable structural trade deficit.
With the still dominant role of resources in its export base, the province is probably not as engaged in global supply chains as other parts of Canada. Most B.C. exports are intermediate inputs in other markets, while imported goods appear to be mainly finished products acquired by local consumers and businesses. This trade structure reduces the potential for productivity improvements and cost reductions associated with purchasing intermediate foreign inputs.
On the other hand, this trade structure means that B.C.`s exports are less import dependent than exports from most other provinces. The advantage is that more inputs are sourced locally, which creates more value-added within the province. The disadvantage of having limited imports inputs in the local production process is that it leaves B.C.`s key export sectors somewhat more exposed to currency fluctuations.
Not surprisingly, the United States remains B.C.`s largest export market, followed by Japan and China. The share of exports destined for the U.S., however, has dwindled over the years in step with the rise of China and other Asian economies. Recently, the fall-off in exports to the U.S. reflects a dramatic decline in lumber exports stemming from the collapse in U.S. home construction. Still, the growing trade relationship with Asia, coupled with Asia`s increasing presence in the global economy, suggests that B.C. has much to gain from Asia Pacific trade initiatives.
Read the full article here.