Canada’s intercept in Australia’s loose China game

Author: Editorial Board, ANU

Engagement has been the bedrock of Canada’s approach towards China for over 50 years. In 1970, Pierre Trudeau, father of Justin, the current Canadian Prime Minister, was among the first Western leaders to open diplomatic relations with Beijing, before the visit of US President Nixon shifted the logjam on US–China relations in 1971. Canada’s co-location alongside its nuclear superpower protector in no way inhibited strategic initiative on China; indeed, it created the space for it.

Caught on the battle front in the crossfire between a more assertive and formidable China and a United States that has suddenly swung into action in the so-called ‘new Cold War’, Canada’s engagement strategy is now under pressure.

Canada’s predicament is encapsulated in the angst generated around the drawn-out detention of Michael Kovrig and Michael Spavor in China (the two Michaels) and the arrest of Huawei CFO Meng Wanzhou in Vancouver on an extradition order requested by the United States under the Trump administration. The fate of the two Michaels, no one is in any doubt, is entwined with that of Meng. The shift in Canadian public sentiment on China has been dramatic.

Polls and commentary on social and mainstream media reveal a gathering landslide of hostility and negative sentiment in the relationship. Concerns about Chinese behaviour extend from Xinjiang, Tibet and the origins of COVID-19, to the South China Sea, developments in Hong Kong and Chinese interference operations.

In our lead article this week Paul Evans observes that ‘the public mood is agitated and negative … The online world is toxic and dangerous terrain for those trying to explain — much less defend — Chinese actions. A whiff of McCarthyism floats in the air as some insist on loyalty tests based on views of Chinese communism. “Elite capture” is offered as an explanation of how academics, businesspeople and politicians who support engagement are witting or unwitting CCP agents … Departments and agencies are quietly examining Huawei’s role in the 5G network, measures to protect intellectual property and strategic resources, university collaborations, and military deployments in contested waters’. Australian readers will relate to this drift.

As Trudeau’s Liberals head towards an early election on the wave of their success in managing the COVID-19 crisis, Evans speculates that the Conservative opposition might try to wedge the government over China.

The Conservatives’ election manifesto is detailed, calling on the country to work with democratic allies and friends to face down Chinese Communist Party (CCP) threats to Canadian institutions and values, plus advance freedom, democracy, human rights and the rule of law abroad.

Despite the hostile atmospherics, Trudeau has continued to seek balance in Canada’s dealings with China. He has deflected charges that his government is soft on China, using hard language to denounce specific Chinese actions (‘hostage diplomacy’ and ‘arbitrary detentions’) and rallying support from friends and allies to pressure Beijing on the two Michaels, Xinjiang and Hong Kong. The Canadian government avoids blanket criticisms of the CCP and rhetorical overreach. If Trudeau has moved beyond engagement, he is yet to fully articulate an alternative.

Despite the fractiousness in Canada’s political relations with China, the economic relationship is surging back after the initial COVID slump. In a thinly disguised political move, China imposed quarantine restrictions on Canadian exports of canola and soya beans in March 2019. Exports of those commodities worth US$3.3 billion in 2018 slumped by 81 per cent in 2019. While the dispute is proceeding through the WTO, oilseed exports have recovered 58 per cent in the first six months of this year and Canadian canola exports have found their way into the Chinese market via third countries. Exports across the range of Canadian exports to China have increased by 23 per cent in the same period and are running above their 2018 peak. Notably, Canada’s barley exports to China are up 238 per cent and coal 185 per cent, helping to fill the gap left by Australia’s being muscled out of these markets.

Many of the issues in Canada’s relationship with China resonate in Australia. Yet the two countries have managed the diplomacy of the relationship quite differently with implications for economic outcomes. As Sourabh Gupta points out in a related article this week, ‘on the substantive issues that have eroded Australia–China ties…

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