Written by Charles Burton and Brett Byers. 

With the election behind us and a new political reality in Ottawa, the real work is about to begin for our political class.

Policymakers must now grapple with issues of consequence, such as how to grow Canada’s economy, how to manage affairs with Indigenous peoples and how to mitigate the impacts of climate change. Despite the importance of those questions, another is being asked with increasing urgency: how should Canada reshape its engagement with China to mitigate China’s growing challenge to Canada’s security and to its commitment to a rules-based international order?

Ever since the arrest of Huawei Chief Financial Officer Meng Wanzhou on an extradition request from the United States in December 2018, Canada-China relations have been at an all-time low. Authorities in Beijing retaliated against Canada by curtailing the import of major agricultural products, including canola seeds and all meat products, worth billions of dollars in sales for Canadian farmers. China also arbitrarily detained a Canadian diplomat on leave, Michael Kovrig, and North Korea–based entrepreneur Michael Spavor, who have been left languishing under the harsh conditions of China’s brutal detention regimen. This detention includes hours of harsh daily interrogation, disorienting sensory deprivation and no access to legal counsel or due process of law.

Beijing is intent on sending a clear message: if Canada wants to enjoy the economic benefits of an enhanced relationship with the People’s Republic of China (PRC), then Canadian political interests must take a back seat to the will of the Chinese Communist Party.

To some, this seems like a radical departure, and to many, the breakdown of relations come as a surprise. After all, what happened to the positive engagement that decades of governments on both sides of the Pacific had sought to engender? Where is the goodwill Canada fostered by acceding to China’s wishes when it came to issues like Taiwan, trade and investment relations, toleration of the PRC’s many domestic violations of human rights and support for rogue regimes including North Korea and Venezuela?

The truth is, our old way of thinking about Canada-China relations is built on the same flawed premise that has characterized many international relationships with the PRC. Successive governments of both political stripes have naively assumed that if they simply appeased Beijing in the right way, or simply engaged in optimal fashion, they could work with China as a partner of equal esteem and enjoy preferential access to China’s burgeoning markets.

Indeed, an entire subclass of supposedly smart policy advisers have risen through the high offices of Canada, promising that they alone possessed that ineffable knowledge and tact necessary to deliver this idyllic and harmonious relationship with Beijing. Businesses with deep ties in China have long urged Ottawa to yield again and again to Chinese Communist interests to foster a positive and mutually beneficial economic relationship. Our political class has been all too eager to believe this soothsaying.

Clearly, though, given the current state of affairs, the supposed collective naiveté of our political class is no longer an acceptable excuse. The Chinese Communist Party has revealed its true character; it has laid bare its ambitions and dispelled once and for all the myth that it is willing to act as a good-faith partner for “lesser nations” like Canada. China itself has, through its own actions, disabused us of the notion that Canada could be considered an equal partner by the PRC. Rather than feign ignorance, we must decide how to reshape our relationship to meet China’s threat to Canada’s political autonomy and economic integrity.

We must first reconceptualize our goals and basic strategy when it comes to Canada-China relations; a lack of fundamental guiding principles around our China policy plays a large part in explaining why Canada is in its present mess. This effort ought to be guided by a core belief that Canada should place its national interests as they pertain to security, prosperity and values first. The desire to work with the PRC must be set against whether or not such engagement would reciprocally benefit Canada.

Canada’s role as a middle power must be put in context. We may be the weaker party in a bilateral relationship with China, but we are in a strong multilateral position as a democratic nation in the Indo-Pacific. Our strategy must strongly realign us with regional allies who share our values to coordinate a concerted response to China’s flouting of the norms of international diplomacy and trade.

What is needed is a measured, principled and forward-looking China strategy that is complementary to the efforts of our key allies and based on the goals and aspirations of Canada. In terms of concrete policy implications, this strategy manifests itself in a number of different ways.

Let’s first consider economic policy. At present, there is a sense that Canada is disproportionately reliant on China economically, which has allowed Beijing to apply economic coercion tactics against us to secure the release of Meng Wanzhou. There is some substance to this concern. As many countries have learned the hard way, we ought to avoid increasing trade reliance on China through an asymmetrical free trade agreement, and should seek to diversify away from China and toward more predictable, fair and likeminded markets in the region.1

More than that, a new Canada-China strategy should consider the limits of China’s economic leverage. As a recent Macdonald-Laurier Institute report makes clear, the kinds of goods that China imports from Canada are naturally constrained, whereas the kinds of goods we import from China are largely available in other markets.2 This is to say that Canada has some significant advantages and China is taking some serious risks in this dispute.

We should be bold in countering China’s economic coercion. An effective new China strategy would recognize that Beijing takes these sorts of economic risks precisely because Communist authorities believe we lack the conviction to push back. Ottawa can strengthen insurance programs to help businesses and individuals mitigate the risks of Chinese reactionism; we can level greater scrutiny against Chinese companies that engage in intellectual property theft; and we can withdraw from the China-led Asian Infrastructure Investment Bank (AIIB). Indeed, backing out of the AIIB will help ensure that Canadian resources aren’t being put toward President Xi Jinping’s “Belt and Road” initiative, with its elements of enabling corrupt dictatorial regimes and debt-trap diplomacy.

Coupled with diversifying our trade, moves of this kind would send a clear message to Beijing and would meaningfully serve to protect Canadian economic interests. They should be considered in a measured and reasonable fashion, employed strategically to shift our linkages and dependencies away from the PRC when necessary and beneficial.

We also must see China’s economy for what it is. It is state-directed, if not state-owned; reliant on intellectual property theft to support innovation; and propped up by CCP favouritism and corruption. We cannot engage with China as though it were a normal market economy.

We must be wary of Chinese companies and their efforts to integrate themselves into our free and open market economy, particularly when it comes to critical infrastructure and information technology. Not only is our intellectual property at risk, but in the case of companies like Huawei and their proposed involvement in 5G telecommunications infrastructure, our national security itself is under threat.3

We must ban Huawei’s involvement in 5G. Anything less is a capitulation of our security interests to the PRC. Such a move would communicate to the authorities in Beijing that, if they want to participate in our economy, they must first change their ways to align with liberal universal values and global norms.

Security considerations go beyond domestic concerns. The PRC is engaged in a massive military effort that threatens the peace and stability of the Indo-Pacific region. Take China’s island building in the South China Sea, corresponding with a rapid increase in funding for the People’s Liberation Army, Airforce and Navy. This aggressive activity aims to expand the regime’s regional dominance, largely at the expense of Canada’s important partners.

We must be clear-minded about the nature of the threat that China’s destabilizing activity poses to the world order and the global peace and prosperity it underpins. While Canada is of limited military means, we can play an important role in initiating, participating in and supporting our allies in regional freedom of navigation missions. We should continue training and security exercises with partners in the region.

This will strengthen our relationship with likeminded allies and help Canada engage China multilaterally with greater strength and leverage. Working with partners on matters like security, Canada will be less isolated as it pursues a measured foreign policy agenda based on our national interest.

Diplomatic cooperation ought to extend beyond security to all diplomatic efforts and activities. In resetting our approach to China, we must engage more actively and with greater sophistication with the Indo-Pacific region at large, including Japan, Taiwan, South Korea and the Association of Southeast Asian Nations. This includes closer coordination with traditional allies like the United States and Australia, as well as partners with whom we have had recent relationship challenges, such as India.

Canada has much to offer the Indo-Pacific. Using our endowments could strengthen our hand in dealing with China. For instance, we possess abundant natural resources, particularly oil and natural gas. Our partners in the region, like Japan, are dependent on energy resources from the unstable Middle East. There is a serious opportunity for Canada to integrate itself into the region through the export of much-needed energy products. In turn we could leverage our energy exports into a better and more important seat at the table when it comes to seeking partners for a unified strategy toward China.

As a nation of immigrants, our people-to-people ties with many countries, from India to the Philippines to Taiwan and others, are robust and positive. We should leverage this soft power to maximize our formal and informal linkages in the region. Canada can better project itself as a member of the Indo-Pacific community, ready and willing to work with likeminded countries.

Canada must consider the benefits and messages sent by rethinking its Taiwan strategy. While such a move would be received with typical vitriol from Beijing, Taiwan is a natural ally that shares our values and with which we enjoy positive (albeit informal) bilateral relations. If Canada were to work more closely with this island nation, it would put China on notice that its aggression and coercion undermine its own strategic interests.

Canada has a lot of latitude when it comes to engaging with Taiwan, through supporting Taiwan’s meaningful inclusion in international forums or closer security cooperation. It has been observed that Canada’s rigid interpretation of the “One China” policy is out of date and out of line with the policies of many of our allies.4 Canada could support Taiwan’s admission to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), taking a leading role in increasing the region’s economic diversification away from mainland China.

Taiwan carries another benefit that too often goes unobserved. There is no government more resilient in the face of China’s coercion efforts than that of President Tsai Ing-wen. Working more closely with our counterparts in Taipei could help yield insights into how Canada ought to approach its relationship with Beijing.

Efforts to remake our China strategy should not be limited to the international stage. There are avenues to be pursued domestically which are just as important. To start, when China arbitrarily detains Canadians, we cannot sit on our hands. Kidnapping Canadians must be met with a measured, proportional response to disincentivize future bad behaviour. This could include returning any known Chinese intelligence agents operating on Canadian soil. Our intelligence agencies are largely aware of who these individuals are, so this could be done with relative ease.

We must crack down on harassing, coercive, corrupt and covert activities by agents of the Chinese state against anyone in Canada. This starts by enacting new, tougher laws against foreign interference, as well as investing in intelligence and policing services to enforce these rules. Furthermore, Ottawa must end government collaboration with China’s United Front Work Department, and must urge provincial governments to do the same. When it comes to designing our approach to combating foreign influence and interference, we can look to Australia for what such laws could look like, and what failures Canada ought to avoid.

Canada must uphold its multicultural values by paying greater heed to issues affecting Chinese Canadians and Chinese international students. We have a duty to protect them from foreign interference, coercion and bullying at the hands of an authoritarian power, often through the United Front Work Department. We owe it to these individuals, who have chosen to call Canada home or made an effort to engage with our society through their studies, to provide the full benefits of a free and open society unimpeded by the control of an authoritarian power.

This requires engaging directly with the diaspora community and making every effort to provide opportunities for integration. It also requires monitoring and scrutinizing universities and other institutions which receive foreign money to ensure that it is not creating undue influence, particularly over Chinese nationals and Chinese Canadians.

As former Ambassador to China David Mulroney has explained, Canada has a blind spot when it comes to Canadians acting as foreign agents.5 Beijing has swayed Canadian opinion leaders of all stripes, including former high Canadian government officials and politicians, who now act as de facto lobbyists for the Chinese Communist Party. To change our China strategy in the long term, we must establish a registry of foreign agents and place restrictions on the titles and positions agents can hold while cashing cheques from foreign regimes.

Canada must act as an impartial, consistent and dependable voice when it comes to calling out Chinese human rights abuses. This includes the important step of immediately condemning excesses by the police in Hong Kong, calling for an independent inquiry into their excessive use of force, and stating clearly that any police or military crackdown in Hong Kong would carry serious consequences. Moreover, Canada must continue to highlight the plight of Uighurs, Tibetans, religious minorities and other persecuted peoples within China. We should weigh the value of Magnitsky sanctions against officials responsible for egregious human rights violations.

None of this is to suggest that Canada ought to disengage from China wholesale. Such a position is neither realistic nor optimal. But it is just as foolish to engage blindly as to disengage blindly. We must be open as a partner when the PRC adheres to international rules and norms, but we must not accept coercion or belligerence from Beijing against us, our allies and the international system.

This reshaping of the Canada-China relationship is a moral imperative and serves as a much-needed pushback against Beijing’s aggressive, revisionist agenda. Only by working with our allies to impose measured and proportional consequences for bad behaviour can we hope to inspire positive behaviour from China. If we fail to stand up for ourselves, Beijing will have every incentive to continue rolling over Canada and our allies.

As Canada asserts its interests through a newfound China strategy, policymakers should expect pushback from the PRC. This is a regime sensitive to any slight and all too eager to throw its weight around when it thinks it is to China’s advantage. This is not a reason for us to back down. It is a demonstration of why we must stand up. An authoritarian regime committed to imposing its will over democracies is the sort of regime we cannot afford to appease.

Finally, such a strategy rethink benefits the Chinese people. They are as worthy as any other to experience citizenship in a free and open society. That dream may be far off, but sustained international pressure will check China’s authoritarian ambitions, encourage positive behaviour and lead, in time, to a brighter future for the Chinese people.

The policies outlined here could be considered part of a new China policy: some first words in the conversation, not the last.

A measured and principled approach to China is ultimately of the greatest sustained benefit first to Canada, then to Canada’s likeminded allies and ultimately to China itself. With a new political configuration in Ottawa, the pursuit of a remade Canada-China relationship is of the utmost importance to Canada’s future as a free, democratic and prosperous nation. Naiveté about China’s global intentions can no longer be our excuse.

Notes

1 See Duanjie Chen, Moving Beyond Rhetoric: Understanding the Practical Consequences of a Canada-China Free Trade Agreement, Macdonald-Laurier Institute, March 2019

2 See Duanjie Chen, Countering China’s Economic Coercion: No Fear but Resolve, No Illusion but Diversification Ottawa, Macdonald-Laurier Institute, September 2019

3 Richard Fadden and J. Berkshire Miller, Why Canada Must Protect Its 5G Networks from Huawei, Macdonald-Laurier Institute, July 13, 2019

4 Eric Lerhe, Rethinking the Taiwan Question: How Canada Can Update Its Rigid “One-China” Policy for the 21st Century, Ottawa: Macdonald-Laurier Institute, September 2018

5 David Mulroney, Shining a Brighter Light on Foreign Influence in Canada, Ottawa: Macdonald-Laurier Institute, October 2019