VANCOUVER - Bank of Canada is upbeat about the ongoing economic transition in China, which it said has the potential to grow at a healthy pace in the longer run.

Bank of Canada is watching China's economic transition closely, the bank's Senior Deputy Governor Carolyn Wilkins said on Tuesday.

China has grown remarkably since undertaking market reforms in the 1980s and joining the World Trade Organization in 2001, said a press release of the bank.

Its transformation has been felt around the globe, notably through international trade and commodity prices, it said, adding that Canada has benefited from China's economic growth.

According to the bank, China is now Canada's second-largest trading partner, and more than 400 Canadian companies have a foothold in China.

Wilkins said China's slower economic expansion rate is bringing it to a more "sustainable pace" of development, which "is not only inevitable, but also desirable."

She cited Bank of Canada researchers as saying China has the potential to grow at healthy pace over the longer run. "One implication for Canada is that China's demand for commodities should remain high and grow from a higher base," she said.

She pointed to steps Chinese authorities are taking to facilitate the transition, including measures to reinforce the social safety net, improve their monetary policy framework and support financial stability.

"The Bank of Canada will continue to watch developments in China closely, given its importance to Canada," she said.