Canada and China are on a pragmatic path to establish an updated working relationship that could include private capital investments, says Jia Wang, senior fellow at the University of Alberta’s China Institute and a senior fellow at the Asia Pacific Foundation.
Last week, Canadian Finance Minister François-Philippe Champagne held several meetings with Chinese officials in Beijing to discuss trade opportunities and business alliances, following an official visit by Prime Minister Mark Carney in January.
“This level of engagement is a market reset from what the relationship has been for the past [eight-plus] years,” says Wang.
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In a joint statement, Champagne, who was also accompanied by Bank of Canada Governor Tiff Macklem during the meetings, said both countries recognize “the important role the financial sector plays in economic growth and facilitating two-way trade and investment and the benefits of deepening relationships between their respective financial authorities.”
China’s economy is resilient amid stress issues, says Wang, noting it would be irresponsible for Canada, as a trade-dependent country in need of capital and good markets to invest in, to avoid business opportunities in China. “It’s just not a country we can afford to look away.”
Investment flows from Canadian pension funds into the country declined at the start of the decade, according to a report from the Asia Pacific Foundation. China was the second-largest investment market for these investors between 2003 and 2018, behind Australia. However, that began dipping between 2019 to 2023, when investment flows to China dropped to about three per cent compared to the rest of the region. The financial value dropped from $627 million in 2020 to $423 million in 2021.
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According to a Globe and Mail report, China’s Vice-Premier He Lifeng said the meeting of economic officials was a key step following Carney’s visit with President Xi Jinping earlier in the year. “With that meeting, our bilateral relationship, after years of being at a low point, as well as our economic and trade ties, have been reinvigorated, and this is indeed something we are very happy to see.”
Wang sees a balanced approach between the two countries as a good step to enhance the level of engagement between Canadian institutional investors and the Chinese market, which is increasingly driven by technology, she adds.
“A lot of the pension funds are investing on behalf of all of us, . . . political tension and frictions between the two economies is one thing. But at the same time, we also have to look at whether these pension funds are generating adequate [returns] for all Canadians.”
China is also poised to facilitate access to additional investable sectors for foreign private capital, according to a newly released five-year plan, noted Wang. “The [Chinese] government is hoping to attract more foreign investment, which also means it’s going to create a more user friendly environment for investors.”
A March report from the China Cross-Border Monitor found a total of US$124 billion in foreign direct investment volumes in 2025, representing an 18 per cent increase from 2024. Domestic capital was mostly attracted to data centres, materials and consumer goods, the report noted.
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