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A Window on the Chinese Market

For the week of Monday August 21, 2006

On August 21, 1972, a 10 day trade fair opened in Peking (now Beijing), China. Sponsored by Mitchell Sharp, Secretary of State for External Affairs, it was at the time the largest trade fair ever staged by Canada. Its goal was to forge a closer trading relationship with the People’s Republic of China.

Mitchell Sharp visiting China, August 1972
Mitchell Sharp visiting China, August 1972
© Unknown Photographer / Library and Archives Canada / 2000629982-11
Ottawa and Peking had resumed formal talks in 1968, after nearly twenty years of strained diplomatic relations. Unlike the United States, Canada had maintained some trade by selling wheat to the Chinese market in the 1960s. Canada’s recognition of the Chinese Communist Government on October 13, 1970 was an important issue for Prime Minister Pierre Elliott Trudeau.  It was also a sensitive decision because of its implicit rejection of the Government of Taiwan, a territory claimed by China. This Canadian initiative would help China open its doors to the world and eventually become a permanent member of the United Nations Security Council.

The election of U.S. President Richard Nixon had affected trade relations with Canada, the United States’ “best customer,” according to Mitchell Sharp. By renewing relations with China, a country that the United States did not recognize, Canada was acquiring a new trade partner that would weaken U.S. influence. The Peking Trade Exhibition aimed to expand the range of products traded between the two countries.

The opening of the Pekin Trade Fair
The opening of the Pekin Trade Fair
© Unknown Photographer / Library and Archives Canada / 2000629982-12
Sharp had realized that Canada was too dependent on the U.S. economy. His solution, known as the “Third Option,” was essentially a policy geared towards greater openness to other trade partners such as China, a key market for stabilizing the Prairie grain trade. Although the Chinese market represented a quarter of the world’s population, it was still primarily agricultural and poor, a situation unfavourable to trade diversification. In effect, the trade fair enabled a delegation of 500 businessmen to present 700 tonnes of goods to 250,000 Chinese!

The Peking Trade Exhibition of August 1972 marked an important step in the history of Canada-Asia relations. Although the event did not significantly change Canadian trade relations, it opened up a new market and helped China find a place in the international community. Mitchell Sharp’s visit to Peking in 1972 and that of Prime Minister Pierre Elliott Trudeau (designated as a National Historic Person) in 1973 raised Canada’s profile in Asia and throughout the world.

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