The Saturday Debate: Has Canada’s relationship with China become too damaged?

“It is important to emphasize that the capture of (Michael) Kovrig and (Michael) Spavor was not a mere bump in the road in our relationship with China,” writes J. Michael Cole. “Business as usual with China will make us complicit in creating a world where the space for human rights, liberty, and democracy is narrowed.” On the other side, relations between Canada and China are at their lowest in 50 years, yet 61 per cent of Canadians believe “Canada can engage economically with China while maintaining a hard line on areas of disagreement,” writes Sarah Kutulakos. “Relationship repair depends on two things: Pursuing Canada’s interests and resuming channels of communication.”

J. Michael Cole Senior fellow with the Macdonald-Laurier Institute and the Global Taiwan Institute YES

The return last month of Michael Kovrig and Michael Spavor, held hostage for more than 1,000 days by China, has been a huge relief to Canada. However, the notion that their release from captivity means a return to normalcy in relations between Canada and China would be as foolhardy as it is dangerous.

Even before Beijing kidnapped two of our own, it was clear that Xi Jinping’s China was an anomaly in the international system, a rising power with the unprecedented ability to cause serious harm to the values that have underpinned our world since the end of the Second World War.

During the time that elapsed between Kovrig and Spavor’s capture and release, China has only become more repressive, more Orwellian, and more self-assured in its ambition to reshape the world so as to make it more hospitable to anti-democratic regimes.

It is important to emphasize that the capture of Kovrig and Spavor was not a mere bump in the road in our relationship with China. Rather, this incident was a symptom, an almost inevitable offshoot, of the kind of regime that we are now forced to deal with.

Under Xi, the Chinese Communist Party (CCP) has tightened its grip on every aspect of Chinese society through a combination of pernicious ideology, excessive paranoia, and censorship directed not only at critics of the regime but in its more absurd iterations, such as the ban on male artists who are regarded as too “effeminate” from performing on television.

Xi, who has turned the party-state into a personal instrument to accomplish his own Mao-style ambitions, has unleashed forces that threaten a second Cultural Revolution.

More troubling still, Xi and his CCP have successfully presented this escalatory assault on liberties in China — to which we must add the neutralization of Hong Kong and vicious repression in Tibet and Xinjiang — as necessary measures to defend China against all enemies, domestic and foreign, and to realize the “China dream,” an ultranationalistic goal that aims to recapture some mythologized past glory.

Meanwhile, China continues to threaten its immediate region with a more assertive military, including its small neighbour Taiwan, the most vibrant democracy in Asia. In recent days, China has sent an unprecedented number of jet fighters and nuclear-capable bombers into Taiwan’s Air Defence Identification Zone to try to intimidate the country.

Within international institutions, Chinese diplomats have used their influence to co-opt officials and, in many instances, to rewrite the rules in ways that often violate the spirit under which those bodies were created. Beijing argues that it is only ensuring such organizations are better adapted to meet the demands of the 21st century, a claim that would be true if we all conceded that our present century should be one characterized by rampant oppression and injustice.

As a country that prides itself in its pursuit of liberal democratic ideals, Canada cannot, in good conscience, pretend it is dealing with a normal country when it comes to Xi’s China, or that, through deepened engagement, we can somehow convince Beijing to reverse course.

To believe today that such an outcome is possible is utterly naive. In fact, business as usual with China will make us complicit in creating a world where the space for human rights, liberty, and democracy is narrowed. And in our interconnected world, we would be foolish to pretend that geographical distance would somehow insulate us from its nefarious effects.

China made important gains due to the pandemic and the moment of inattention that paralyzed much of the democratic world in recent years. But the pendulum is now swinging in the opposite direction, and the world’s democracies are now beginning to push back.

Canada has an important choice to make. It is a choice that will define who we are: a people who believe that the world is what we make it, or as cynics who resign ourselves to forces we believe cannot be countered. That choice will be predicated on how we, the people and our government, decide how to deal the Chinese party-state that constitutes the greatest challenge of this century.

J. Michael Cole is a Taipei-based senior fellow with the Macdonald-Laurier Institute and the Global Taiwan Institute. He is a former analyst with the Canadian Security Intelligence Service in Ottawa.

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Sarah Kutulakos Executive director and COO of the Canada China Business Council NO

Canada’s relationship with China is damaged. Each detaining the other’s citizens has put bilateral relations in the deep freeze since late 2018. The stark difference in detainee conditions highlighted the vast difference in the two systems, which contributes to record-low public opinion of China.

With the release of Michael Kovrig, Michael Spavor and Meng Wanzhou, a major barrier to resumption of the relationship is gone. This doesn’t mean a new normal will be quick and the old normal may never return.

Where the economic relationship is concerned, Canadians tend to be more pragmatic. In a recent Canada China Business Council (CCBC)-Ipsos poll, 67 per cent of respondents said exports of services, such as education or tourism, are important because they foster better understanding and further economic opportunity.

Sixty-one per cent believe Canada can engage economically with China while maintaining a hard line on areas of disagreement, such as human rights. A forthcoming CCBC report on the economic value of China to Canada highlights how lesser-recognized relationship elements, like immigration and education, contribute billions of dollars in annual GDP to Canada.

Relationship repair depends on two things: Pursuing Canada’s interests and resuming channels of communication.

We often hear that Canada is a trading nation. What does this mean? Canada’s 66 per cent trade-to-GDP ratio puts us behind only Germany among G7 economies. We depend on trade, but we don’t want overdependence on any one trading partner.

The U.S., which buys 74 per cent of our exports, will always be the easiest and most aligned. China buys 4.8 per cent of our exports, so we are certainly not overly dependent on China, but it has and will continue, according to the IMF, to contribute one-third of global GDP growth going forward.

The Chinese middle class wants foreign goods and services, so growing exports benefit Canada. The Meng-Michaels saga has caused some companies to look elsewhere for growth. However, substitute markets, like India, with only 0.7 per cent of 2020 exports, are far behind, making diversification a long-term proposition. As is the bilateral relationship.

Last year marked 50 years of Canada-China diplomatic relations and those decades have seen ebbs and flows. While the current ebb is the lowest, we will emerge. The key to resumption of more normal relations is engagement. Frozen mechanisms at all levels must resume.

For businesses, resumption of the annual Canada-China Economic and Financial Strategic Dialogue (EFSD) is crucial. A recent audit of the analogous U.S.-China dialogue showed that the U.S., which is currently in its own relationship ebb (yet sent 8.7 per cent of its exports to China, nearly double Canada’s), determined that the dialogue served U.S. interests.

Areas of benefit included macroeconomic stability, greater transparency and rights protection, public health management, climate change/clean energy and security co-operation. The process regularized policy prioritization and decision making; it also addressed asymmetries between the two bureaucracies, which allowed U.S. interests to be progressed. The more different countries are, the more they need such mechanisms, which are key to giving Canada ways to voice differences with China, while focusing on complementary areas.

By resuming dialogue, we make slow and steady progress in relationship repair. We can solve pressing issues, such as the canola dispute, and move on other aspects of the relationship that will help Canada advance its prosperity as a trading nation and its value as a multilateral actor.

Much as Canada was the metaphorical meat in a U.S.-China sandwich over Meng and the two Michaels, Canada will remain in the middle of a great power competition, in which China aggressively projects its power and the U.S. does all it can to prevent China’s rise.

Rest assured, the U.S. will look out for its interests along the way. U.S. Trade Rep. Katherine Tai stressed this week that “China made commitments intended to benefit certain American industries, including agriculture, that we must enforce,” and that the world’s two largest economies would be “recoupling” instead of decoupling.

Indeed, U.S. enforcement of its phase one trade agreement may come at the expense of Canadian agricultural exports to China. Australia, which has asserted its interests and taken unpopular positions against China, has nonetheless continued to grow exports to China, with mid-2021 values reaching record levels. Both countries demonstrate the ability to “walk and chew gum at the same time.”

Canada can, too. China will continue to rise and Canada is best served by repairing the relationship to ensure its rise serves Canada’s interests, rather than yielding them to like-minded competitor countries.

Sarah Kutulakos is executive director and chief operating officer of the Canada China Business Council.

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