Canada has options for lessening its trade dependency on China, not that voters would know this or anything else about China from following the federal election campaign.
It is almost a mantra that the Canadian electorate is never seized by foreign policy questions. But China could become the exception because it increasingly has the economic clout to assert itself diplomatically and militarily in ways that are already troubling.
Not long after Justin Trudeau became the Liberal leader in 2013, he infamously said that he had “admiration” for China’s “basic dictatorship.” More recently, Trudeau has not repeated that stunning proclamation.
What to do about China has barely been discussed by Trudeau or any of the other leaders during the federal election campaign. Yet polls have shown Canadians have become deeply concerned about the rising Asian economic colossus and their country’s relations with it.
The profound feeling of unease about China has not only been felt in Canada but across Asia as well as in the U.S., Europe and Australia. Dark sentiments about a foreign country have not been part of Canadian life since the country was still a Dominion back in the early years of the Cold War.
Such attitudes have been stoked by Beijing’s willingness to use trade as a cudgel, its much bigger military budget and its brazen building of artificial islands with airfields equipped with hardened fighter jet hangars and ammunition dumps to support its dubious claim to much of the South China Sea. This comes only a few years after Chairman Xi Jinping stated that his country’s intentions in these waters were entirely peaceful.
It was Chairman Xi who declared that his country is “a near Arctic state.” Whatever that means, it is being backed up by a fleet of icebreakers including nuclear ones that will soon outnumber those operated by the Canadian and U.S. coast guards combined.
The recent headlines in Canada about China and in China about Canada have inevitably been about the seemingly interminable extradition proceedings against Meng Wanzhou. As a senior executive with Huawei Technology Co., the heiress has been charged with criminal offences in the United States related to her communications conglomerate’s business dealings with Iran.
Beijing reacted to the billionaire’s detention in Vancouver by kidnapping two Canadians in what was widely regarded as a naked attempt to try to force Ottawa to release her. This has fed background chatter about Canada possibly losing trade opportunities in China or getting shut out entirely if it does not free Meng.
This is very big stuff but the potential risk to the two Canadian prisoners, who are being held in far worse conditions than the gilded cage (house arrest with freedom to move around Vancouver) in which Meng finds herself since being granted bail, has apparently been the reason the government has not said much about China during the election campaign. For the same reason, the opposition looks as if it has mostly agreed to go along.
Who can be blind to the fantastic economic opportunities that would be there for any nation that signs a trade agreement with China? As it is, China accounts for just over half of Canada’s trade with Asia. Still, lost in the hullabaloo over Huawei and the messaging of a gang of ardent sinophiles in Canada’s diplomatic corps and such worthies as Jean Chretien and John Manley about how Ottawa must smooth things out with China, several other Asia nations — Japan, South Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand, accounted for about $80 billion in bilateral trade in 2018. That’s approaching the $103.2-billion value of Canada’s bilateral trade with China.
Other than its kidnapping of Canadians, one of the main reasons that Canadians should be cautious about getting closer to Red China is that trade between the two countries is badly skewed in Beijing’s favour. Exports to China represented $27.7 billion in merchandise trade in 2018. Imports from China in the same year were $75.6 billion.
Another warning sign is that with Europe and Asia and now with Canada, China has frequently demonstrated that it is not always a reliable partner. When things do not go its way, Beijing often has what can only be described as tantrums. It can suddenly order its tourists to stay home, as it has done with Japan, South Korea and the Philippines, or it can suddenly slap trade tariffs or total import bans for bogus health concerns as it has done this year on products such as Canadian canola, pork and beef imports.
One of the many puzzles created by Canada’s emphatic embrace of China, despite the humiliations that it has suffered, successive Canadian governments have ignored somewhat similar problems that Australia and New Zealand have had with Chairman Xi’s regime for several years now.
The fixation of Canadian leaders and bureaucrats (I hesitate to call them mandarins) on growing the country’s helter skelter relationship with the Middle Kingdom has apparently blinded them to the reality that there are other rich veins that Canada could tap more heavily into in Asia. Or, as a Japanese diplomat put it to me the other day, though Canadian officials seldom mention this, Canada has no better friend in Asia than his country.
Japan and South Korea, with their formidable economies and their own complicated entanglements with China, are eager to greatly expand trade with Canada. This is true of Asia’s other potential financial powerhouse, India, the other Chinese economic dynamo, Taiwan, as well as Singapore, Vietnam, Malaysia and Indonesia.
Taipei gets almost no love from Ottawa. Since the days of Trudeau the Elder, Canada has given it the cold shoulder to appease China which insists that it must oversee the island state, though most Taiwanese want nothing to do with their authoritarian cousins across the water. China has imprisoned hundreds of thousands of its Muslim Uighur minority in reeducation camps, has been mistreating Chinese Christians and has violently attempted to have its way in Hong Kong. On the other hand, Taiwan is a democracy that respects human rights. Like the bigger China, it has rapidly industrialized and has booming, highly innovative industrial and high tech sectors.
Taiwan is Canada’s 13th largest trading partner. Trade between the two countries reached nearly $8 billion last year and Taiwanese officials believe that it could grow dramatically from that figure.
It is obviously in Canada’s interest to increase trade with Taiwan or any Asian country except North Korea, especially since it becomes more obvious all the time that Ottawa’s ties with Beijing are a total mess and that it will likely be for many years before they recover.
Rather than obsessing in private and saying little in public over how badly things are going with China, Canada’s political class should address the anxieties that many Canadians have about closer relations with Beijing. Canada must continue to do as much trade with China is possible, but it should be a priority to seriously promote greatly expanding trading partnerships across Asia.
There is no better time to begin to talk to Canadians about ways to get out of this morass than during a federal election. Canada has options that voters might wish to consider.