Canada reduces U.S. trade reliance as China rises

OTTAWA, Nov 8 (Reuters) - Canada has reduced its dependence on the U.S. economy by boosting its exports to other countries, particularly China, which is hungry for Canadian oil and other commodities, a Statistics Canada report said on Thursday.

Canada's exports to the United States as a portion of total exports fell to 76 percent in the first seven months of this year from a peak of 84 percent in 2002, with China explaining much of the shift.

"The recent shift to increased trade with the rest of the world was well-timed, given the onset of the housing-induced slowdown south of the border," Statscan said in its report.

Canada's economy has so far showed little pinch from the U.S. subprime mortgage meltdown and many economists say that cross-border contagion is no longer a given.

Canadian exports to China in the January-July period jumped 43 percent from a year earlier, while imports climbed only 17 percent.

Exports to countries other than the United States grew 68 percent between 2002 and 2007, while those to the United States were up just 5 percent, Statscan said.

"All regions of Canada have benefited from this shift in exports toward non-U.S. countries," it said.

The rate of export growth this year surpasses that of any other Group of Seven nation and puts China neck-and-neck with Japan as Canada's third-largest export market after the United States and the European Union.

Demand from China's booming economy for Canada's crude oil, metals, potash and canola -- combined with higher prices for those products -- propelled the sharp rise in exports.

Canada's exports to China nearly doubled in the period from 2002 to 2006 to C$8 billion ($8.6 billion).

($1=0.93 Canadian)

(Reporting by Louise Egan; Editing by Peter Galloway)