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What is the People’s Republic of China to Canada? Towards a rethinking of bilateral relations

International Journal: Policy Brief

International Journal
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Copyright: The Author(s) 2021
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DOI: 10.1177/0020702021996315
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Prepublication Version

What is China to Canada?

Towards a Rethinking of Bilateral Relations[1]

The Honourable Yuen Pau Woo
Senator for British Columbia

2021 will be the year of recalibrating Canada’s international policy and foreign relations. In the spirit of “building back better”, there is an opportunity for Ottawa to revisit relations with all major regions of the world.  Foremost is the United States under a new administration and the promise of a less unpredictable relationship. Across the Atlantic, relations with the EU will take on a new quality in part because the UK will no longer be part of the Union, but also because the consequent weakening of the EU will force greater introspection on the part of Brussels.  Our special relationship with the UK will, in turn, be tested for just how much historical and cultural ties matter if a Britain that is unmoored to Europe enters an accelerated phase of post-imperial decline.

But the most vexing of all will be China.  Indeed, Ottawa’s relations with China will be the single biggest foreign policy challenge for the foreseeable future. More so than at any time since the debates around diplomatic recognition of the PRC in the 60s, there is a groundswell of opinion on the need to rethink Canada-China relations.  Like the earlier debate, there are recurring themes: Pressure from the United States, the desire for a more independent foreign policy, fear of communism, revulsion over human rights abuses in China, economic interests, and realpolitik.

It is on the last two items where the differences are most pronounced, compared with 50 years ago.  Our economic interests vis-à-vis China are much larger than they were in the 60s and 70s, and – more importantly – China’s economic weight in the world is far greater than it was in the post-war period.  China’s share of global output was just three percent in 1970, compared to about 18 percent today.  While China’s growth has slowed, and may slow yet further, it has already expanded to such a size that even modest economic expansion in China amounts to a significant boost for the world economy.  The world woke up to this fact after the 2008 global financial crisis, when China emerged as the most important source of global demand, accounting for about half of global growth over the next decade.  In 2020, amid economic downturns across the world, China will be the only major country to show positive growth for the year as a whole.

The realpolitik of relations with China has also become much more important as a factor for Ottawa to consider in its changing relationship with Beijing.  Back in the 60s, John Diefenbaker, Lester Pearson, and Pierre Trudeau could only guess at the importance of bringing China into the international community. They did so in the belief that Beijing would be less disruptive in the global tent than outside of it. 

Today, China is truly a global player, and Chinese actions around the world – for better or worse -- touch on Canadian interests whether we like it or not.  Think about demand for natural resources, climate change, Arctic policy, peacekeeping, and well, pandemics, just to name a few.  Whereas in the previous half-century, it was possible to pursue an essentially piecemeal and transactional relationship with China, it will be untenable in the years ahead for Canada to treat relations with China as simply the sum of our interactions. 

In the current context where the detention of a senior Chinese executive in Vancouver has resulted in callous retaliation against a Canadian businessman and a Canadian diplomat, the “transactional” approach is clearly not working.  Many critics of the current approach have reached for what seems like the obvious solution, which is to dramatically reduce transactions with China. This response, however, is naïve about the prospects for diversification into other markets and severely underestimates the importance of the Chinese market for global demand and the role of Chinese enterprises in supply chains far beyond the People’s Republic.

 

In the Shadow of Great Power Competition

Canada-China diplomatic relations have always operated in the shadow of Canada-US ties.  This was as true when Diefenbaker decided to sell wheat to China in the face of opposition from JFK, as it was when Chretien agreed to grant China Most-Favored Nation (MFN) status, contrary to the position taken at the time by the Clinton administration.   It is still the case today, only more so because of heightened competition between the United States and China that is spilling over to Canada and other countries that are caught in between.  On the one hand, US policymakers are dismayed that economic engagement with China has not resulted in a relaxation of political control on the part of the CCP, or greater openness to foreign competition in the Chinese market.  On the other hand, the Chinese leadership, especially since the advent of Xi Jinping, has become more self-assured, even cocky, in its assessment of national economic and military capabilities and accordingly, more assertive in the defence of its policies domestically and abroad.  This has all the hallmarks of great power competition, with its attendant risks for each side as well as for third parties, as the history of power transition will attest. To date, the geopolitics of US-China strategic competition is couched in euphemisms such as de-coupling, techno-nationalism, and de-globalization, with some commentators brushing aside the possibility of serious damage to the world economy.  Dreamers in Beijing and DC fantasize about the rapid demise of “decadent and ungovernable” American society or the sudden implosion of a “corrupt and illegitimate” Communist Party. The more likely reality, however, is that strategic competition between China and the United States will last decades, and that as the contest deepens, the interests of each side will increasingly take precedence over the views and preferences of third countries.

The question, accordingly, is how to position Canada in the decades-long struggle for economic and technological supremacy between the US and China.

One approach is to follow the Chinese saying 坐山观虎斗 – watch the dueling tigers from a mountain.  And indeed, there will be instances in US-China strategic competition when the best course of action for Canada is in fact to not get involved, but to merely observe from a distance. 

However, given the highly interconnected world that we live in, and the deep ties that Canada already has with the US and China, it will be impossible to be merely a passive observer of all Sino-US conflicts.  For one thing, there are collateral effects from conflict between two great powers.  Often, these effects are negative, such as we see in the dampening economic outlook every time there is an escalation in the US-China trade war.  Sometimes, though, the effects may be positive for Canada.  For example, if Washington DC makes it more difficult for top students and researchers from China to work in the United States, Canada could benefit by attracting those talented individuals to Canadian institutions (but are we?).

The point is that the US-China conflict is being fought from the perspectives of Washington DC and Beijing, and neither side is thinking about the implications for Canada.

We do not know how this multi-decade conflict between the US and China will play out, but we should be clear that it is not a repeat of the Cold War.  The Cold War was fought between two adversaries which had profoundly different systems and were significantly mismatched in their economic capabilities.  The US and Soviet Union had much fewer economic and civil society ties than the US and China currently have, and the nature of the two regimes made for military and other alliances that were much more clear-cut than is the case today.  Furthermore, the cold war was fought, from the US perspective, on the assumption that the Soviet Union would eventually collapse under its own weight of economic inefficiency and unsustainable military spending – which is what happened.  There are of course many who believe that the People’s Republic of China will meet the same fate as the USSR. Indeed some are counting on it to happen, and trying to accelerate the process.  But with a Chinese economy that is already larger than that of the US in purchasing power terms, and the Chinese market serving as the number one destination for exports from over 120 countries, we should fervently hope that China does not implode.

It is precisely that we are not in a cold war redux where it is easy to take sides that makes China policy so challenging.  This is a new foreign policy challenge not just for western democracies, but for all countries that are – like Canada – ants scrambling for cover under the two fighting elephants.  From Tokyo to Canberra, Pretoria to Cairo, Istanbul to Helsinki, and across the Americas, foreign ministries are searching for a new playbook to advance their interests with respect to the US and China, and to avoid being trampled by either or both of the powers.

 

Rethinking China policy

Ask any informed Canadian about how they would define Canada’s relationship with China and the answer would be either a blank look, or more likely, a list of the problems that are currently dominating the headlines, e.g. Meng Wanzhou, Michael Spavor and Michael Kovrig, Hong Kong, Xinjiang, Canola, Wolf Warrior Diplomacy, foreign interference, and so on.

There is indeed a long list of problems that characterize current relations, but a list in itself does not define a diplomatic relationship. A list is simply a list.  One could presumably make a list of good things that are happening between Canada and China, but that would also be simply a list and it wouldn’t go very far in terms of defining the bilateral relationship, or helping chart a course for the future.  Let me put it a different way:  We can identify lots of problems in the Canada-China relationship, but we have yet to identify the problematique.  A problematique is not a list of problems; it is rather a way of defining the overarching problem, or question, that you are seeking to address.  In foreign policy terms, I believe it boils down to how we see China in relation to Canada – now and in the future. Another way of putting it is to ask the question “What is China to us”?

Is China a “Reluctant Adversary”, to use the term coined by Professors Paul Evans and Bernie Frolic in their history of bilateral diplomatic recognition? Is it a “Fast Growing and Indispensable Market” along the lines of phraseology that was very common during the go-go years of Team Canada? Is China a “Strategic Partner” as Paul Martin and Hu Jintao declared as recently as 2005? 

To be sure, some commentators have already made up their minds:  Last year, the Globe and Mail editorial board proclaimed China a “threat” to Canada.  If this is in fact the problematique for Canadian policy towards China, we have to seriously consider all of the implications that flow from branding a foreign country (and a superpower, no less) a threat.  Without actually using the “threat” moniker, much of the public discourse on China is already being conducted as if it were a settled issue – with troubling implications for the way we manage all things Chinese, including Chinese enterprises, immigrants from China, ethnic Chinese Canadians who have no connection to the PRC, civil society groups with links to China, and so on.

 

China as a Global Neighbour

There are of course other ways of identifying the problematique, including “competitor”, “rival”, “partner”, even “enemy”.  All of these terms have normative elements which would conform to the preconceived notions of an individual’s preferred nomenclature.  I would like to offer a term that is less value-laden, in the form of China as a “Global Neighbour”.  It may come as an affront to those who are repulsed by China that I would speak of the PRC as a neighbor – with all of its connotations of well, “neighbourliness”.  But think a bit more deeply about your neighbourhood and it is likely that you will be able to identify neighbours who are not “neighbourly”.  That troublesome neighbour may even be the one with the biggest residence on your block.  What’s more, we don’t get to choose our neighbourhoods – at least not in the context of international policy.  The idea of China as a global neighbour underscores the reality that Canada is in proximity with China on so many fronts and in so many places – not just in the geographic sense, but on all the issues that matter to Canada domestically and internationally.  In some geographies and on some issues, our stance to our global neighbor should be to build a sturdy fence; in other areas, we should have an open border; yet other areas, something in between.  But it is clear that we have our territory and China has its own, and there will be times and instances when the governance of our territory is markedly different from that of China.   

If we accept that China is in our neighbourhood (and we are in China’s), the question is how we conduct ourselves in relation to China on each and every issue where the PRC is a global neighbour.  As with our literal neighbourhood, there is no “one size fits all” answer to the question of how we deal with the folks who live nearby.

Here are some principles for how I believe Canada should respond the global neighbour that is China, in the context of growing US-China strategic competition:

 

Five Principles

First, we should not give up on a liberal, rules-based international order and the role of multilateral institutions in the management of conflicts among member countries, from trade to nuclear proliferation.  This means working with those segments of American and Chinese society that share this view, and to the extent possible, getting like-minded American and Chinese to work together with Canada on global challenges. Climate change and global health are obvious near-term examples for such joint efforts.

Second, we should give up on the idea that it is part of Canada’s mission to change China.  Through the centuries, western missionaries, explorers, colonizers, merchants, and modern-day diplomats have in one form or another pursued this goal, mostly with good intentions.  The high point of this historical endeavor was China’s entry into the World Trade Organization in 2001, which many believed would be the turning point for the People’s Republic to become a more market-oriented economy, and that the power of opening up to the world would in turn spur the advance of individual and collective liberties in China.

We were wrong about our assumptions on how to change China, and we should be humble about whether a different strategy would produce better results.  It should come as no surprise that a proud and ancient civilization such as China’s would be resistant to pressures for change from outside the country – even more so now under the heightened political and ideological control of the current leadership.

And yet, China has changed profoundly in the 40 years since the start of economic reforms in 1979, so it is not that change is impossible.  It is certainly not the case that Chinese people are unsuited for democracy or for a high level of individual freedoms.  But the change that has come about in the People’s Republic has been driven mostly by forces from within the country and under the direction of domestic political leadership, which is not immune to pressures from within. Further change in Chinese institutions and their governance, and in the relationship between the Chinese state and civil society, will emanate from inside China, with the role of foreign pressure playing an ambiguous role, at best.

Canadian policy towards China should be about advancing Canadian interests, but it should not be “missionary” in its intent.  If there is a demonstration effect from our actions on Chinese behavior, well and good.  But we should not make “conversion” a goal of our foreign policy.  Accordingly, we should not deem our foreign policy to have failed if, 20 years from now, China still looks very different from the West, as it does today.  In fact, this may not even be a meaningful test by the time we get to the 2030s.

Third, we should signal clearly to the Chinese leadership that we want China to succeed in its economic aspirations.  At the core of the US-China strategic rivalry is the notion that the US does not want the PRC to become a fully developed economy and in so doing, surpass America in a range of economic and technological domains.  Whether or not this is true of US intentions, it is a widely held belief in China and runs counter to Xi Jinping’s goal of China becoming a comprehensively developed country by 2049 (the centenary of the founding of the People’s Republic of China). 

Canada should articulate at the highest levels of leadership our support for China’s goal to become a fully developed economy by 2049.  More than that, we should say that we want to be part of China’s journey to 2049 and to share in the country’s success on the way there.  Acknowledging China’s legitimate desire to become a developed economy and expressing support for it will go a long way in dispelling suspicions about the west trying to hold back China. This strikes me as a diplomatic “no-brainer”, but you will be surprised by how contentious the idea is, in the current febrile environment of trans-Pacific tension that we are living in.

Fourth, even as we say that we want China to be successful, we should also be very clear that Canada differs with China on many issues related to human rights, individual freedoms, and the rule of law.  And while we would wish that China’s journey to becoming a developed country comes with an expansion of rights and freedoms for its citizens, our focus on these issues should be in Canada, where we have the ability to set standards and enforce laws.  This means taking a stronger position on any denial of freedoms by individuals and groups in Canada with respect to issues affecting China.  If Canada is to lead by example, it must act consistently in the jurisdiction where it has the power to lead – and hence must resist and repel any attempts (from domestic and foreign sources) to interfere in Canadian democracy through coercion, corruption, and covert actions. 

Finally, on every issue that confronts Canada with having to make a choice between the US and China, our decision must be pragmatic.  We should take a longer term view rather than one that responds to current political or business pressure, or worse, prejudice.  For example, we should reject the idea, increasingly common in the United States and Australia, that China is a “whole of society” threat.  This view has the potential to taint all things Chinese as threats to national security and Canadian society in general, and has already infected discussions around housing affordability, money laundering, cultural activities, and international students in Canada.  It could distort important policy decisions around foreign investment, research collaboration and funding, infrastructure development, and international mobility – to the detriment of Canada.

The advent of a more internationalist US administration offers hope for greater alignment between Ottawa and DC. The Biden promise of a return to multilateralism opens the door for Canada to work more closely with the US (and other multilateralists) on global challenges. But the Biden administration has also signaled that it will seek to assemble a coalition of democracies to work together in opposition to China. On the latter, Ottawa should be more discriminating, not just because of diminished American credibility on democracy promotion, but also because US-led efforts are as likely to be driven by the imperatives of strategic competition with China, as by the collective good.

It is precisely that Sino-US competition will be hard fought and decades-long that the foreign policy choices of third countries – including Canada – can lead to a more, or less, fractured world.  Canadian policy towards China is therefore ripe for change. 

It will take some time for us to find a new equilibrium, in part because of current difficulties in the relationship, but more so because we have to build consensus across political lines and with the Canadian public about a different framing of Canada-China relations.  Too often, the choice is presented as one that either “sees no evil” (China is an indispensable market), or “sees only evil” (China is a threat).  Embracing one extreme or the other will only lead Canada into dead-ends.  By instead framing China policy in the context of Sino-US strategic competition and recognizing China as a “global neighbour”, we can better situate Canada’s long-term interests and increase our flexibility on domestic and international issues.  This is the single biggest foreign policy challenge for Canada in the first half of the 21st century.

[1] Originally Delivered as a Speech to the Canada-China Friendship Society of Ottawa on 24 November 2020.

Read the version published in the International Journal