Golden anniversaries are usually an opportunity for celebration. But Canada-China relations are at their lowest ebb since Pierre Trudeau and Mao Zedong established diplomatic relations in 1970. The ongoing saga of the 3Ms – Meng Wanzhou and Michaels Spavor and Kovrig – personify the diplomatic rupture. But we have deeper systemic differences – not just on the rule of law, transparency, and human rights – but on interpretations of international agreements and the rules-based system that underwrites the global order.

For Canada and its allies, the situation is complicated as Sino-U.S. relations morph into a new Cold War. Miscalculation could create a hot war. We need to put a premium on diplomacy, rediscovering our old habits of helpful fixing, and helping to create peaceful coexistence.

We need to consider a menu of options for eventual reengagement with China: on sovereignty and security, on diplomacy, on trade, on human rights, on Hong Kong, on Taiwan. We need to be conscious that developing and implementing a China policy will be challenging. Effectiveness requires popular support and cross-party consent. It will need to adapt to external events. Most of all, it will require a China willing to deal with us, not as an American vassal-state, but as a middle power, G-7 member, and G-20 partner.

What a mess! Who would have thought that Canada’s decision to proceed with the extradition request from the United States for Huawei Chief Financial Officer Meng Wanzhou on fraud charges in December 2018 would have resulted in the Chinese imprisoning Canadian businessman Michael Spavor and former diplomat Michael Kovrig on national security charges, and then boycotting Canadian meat and canola?

We can expect more of the same from a rising and defiant China. Nor is Canada alone. There are numerous examples and methods by which Beijing penalizes countries that incur its wrath, including hostage diplomacy and curtailing trade privileges. Like our canola, Norwegian salmon was boycotted after Liu Xiaobo was awarded the Nobel Peace Prize. When Australia pressed for an international inquiry into the origins of the novel coronavirus, its beef exports were suddenly derailed.

After accusations from then Chinese Ambassador Lu Shaye of “western egotism and white supremacy,” the Chinese diplomatic offensive against Canada continues.  Canadian efforts at Track Two dialogue, ministerial outreach, and the appointment of a new Canadian ambassador have not improved relations. The Chinese think Canada is behaving like a tributary to the United States, undermining the value of the relationship that convinced Chinese leadership to connect with Canada in 1970.

There have been ups and downs in the relationship. Canada, like other western nations, imposed mild sanctions in the wake of the Tiananmen Square massacre (1989). The general approach to China, especially under Jean Chretien and the Team Canada missions, was towards closer trade, commerce and people-to-people ties. The Harper government’s initial ideologically-driven ambivalence to the relationship led to a public chastisement by then Chinese premier Wen Jiabao (2010), but we still achieved a Foreign Investment Protection Agreement and an Approved Destination Status that has significantly increased Chinese tourism to Canada.

The ‘3Ms’ take relations to a nadir. They symbolize fundamental difference in our systems. In democracies like Canada, the rule of law means an independent judiciary. In China, the judiciary does the biding of its authoritarian Chinese Communist Party (CCP) leadership.

China’s aggressive behaviour is alienating its neighbours and trading partners, as Canadian ambassador Dominic Barton recently observed. As with attitudes in other democracies, China’s behaviour has changed Canadians’ perception of China and eroded their confidence in closer relations.

The affair has also underlined that a weakening rules-based system leaves Canada exposed and vulnerable. Once we could count on immediate support from allies, especially the U.S. Instead, President Trump initially mused about including Meng “if I think it’s good for what would certainly be the largest trade deal ever”. Despite a request from Mr. Trudeau, he cut a deal without reference to freedom for the Michaels. The Europeans eventually spoke out, but it took diplomatic effort. It has been a sobering education in geopolitics for Mr. Trudeau and the Canadian public.

“There’s a level of admiration I actually have for China. Their basic dictatorship is actually allowing them to turn their economy around on a dime.” Liberal Leader Justin Trudeau, November 2013

“Canada has an independent judicial system that functions without interference or override by politicians. China doesn’t work quite the same way and doesn’t seem to understand that.” Prime Minister Justin Trudeau, May 2020

“We continue to work with partners and allies around the world on ways to ensure that China knows that its actions in Hong Kong are deeply troubling, are of real concern for the sake of people of Hong Kong but elsewhere around the world as well” Prime Minister Justin Trudeau, May 2020

Source: Pew Foundation, Angus Reid

The admission of the People’s Republic of China into the post-war rules-based system – taking the Chinese seat in the UN Security Council in 1971 and then joining the World Trade Organization in 2001– acknowledged geopolitical realities. There was hope, even expectation, that with economic liberalisation would come political liberalisation, and that China would embrace the norms of the rules-based liberal international order. It hasn’t worked out that way. Instead, China is defining its own approach to the international order. As the erudite Chinese Ambassador Fu Ling observes, “that same order is like an adult in children’s clothes. It is failing to adjust.”

The net effect of Chinese policies – trade and economics, security and defence, and human rights – has led western leadership to conclude that China constitutes a systemic competitor and a strategic adversary to democracies and to our values.

Initiatives like Made in China 2025 aim to make China dominant in global high-tech manufacturing through robotics and artificial intelligence. They utilize government subsidies and mobilize state-owned enterprises. Their practises include discriminatory treatment of foreign investment, forced technology transfers, intellectual property theft, and cyber-espionage. While China acknowledges climate change, it is the world’s biggest carbon emitter.

Source: Tomastvivlaren

China’s state-driven economic model and its state-subsidised companies take advantage of the openness of western economies, out-competing businesses playing by market rules. Its Belt and Road initiative strengthens China’s economic and security interests in Eurasia and beyond. An estimated one-third of global shipping passes through the South China Sea. China is now capable of controlling these vital waters in all scenarios “short of war with the United States.” China’s nuclear forces are expected to double in size over the next decade, composed of a triad of ICBMs, submarine-launched ballistic missiles and bombers.

Source: Duchâtel & Sheldon-Duplaix, 2018

Chinese cyber-espionage, disinformation, and subversion reinforce the domestic rule of the Communist Party and spread Chinese soft power abroad. Internationally, Chinese Foreign Minister Wang Yi says that China’s new ‘wolf warrior’ diplomacy is to push back against “deliberate insults”. Bravado and insecurity are a dangerous combination.

Under Paramount Leader Xi Jinping, the Chinese Communist Party has instituted a domestic “pervasive system of algorithmic surveillance” to control dissent. Arguably, this is the inevitable result of Chinese history that, throughout 5000 years, despite a mostly homogenous population, endured war-lordism, factionalism and a ‘Century of Humiliation’ in the wake of the Opium Wars, western occupation of its port cities, and Japanese invasion. Its neighbours include five nuclear armed states. If Russia, North Korea, and Pakistan are ‘friendly’, it’s only in a fair-weather sense.

The one certainty for the Chinese Communist Party is the importance of stability and the centrality of the CCP in guaranteeing that stability. The CCP has profited from rapid economic growth. This buys legitimacy. The Chinese system is becoming more hierarchical and authoritarian and, under Xi, it is moving from institutional to personal autocracy. If repression ratchets up, will the Chinese people still want this system? What will happen in economic crisis?

Hong Kong’s high degree of autonomy and rule of law is guaranteed to ensure Hong Kong’s future prosperity and success. With the world distracted by COVID-19, China is taking advantage to bring Hong Kong to heel. Deng Xiaoping once described it as “the pimple on China’s arse,” but he supported ‘one country, two systems’ because Hong Kong was the conduit for incoming foreign investment. Xi Jinping appears to believe that, having built up Shanghai as an international center, Hong Kong has lost its value. He is likely wrong. Hong Kong has become the third largest financial center after New York and London. Xi’s new national security law threatens to kill the golden goose that is Hong Kong.

Under this law, China, not Hong Kong, will define what are its authorities. What will happen when China places its security agents in Hong Kong? The new law violates China’s undertakings under the Sino-British Joint Declaration (1984). The foreign ministers for Canada, Britain, Australia, and the United States have expressed extreme concern. The British have promised to provide residency rights to their estimated 350,000 overseas passport holders. The Trump administration says it will withdraw Hong Kong’s preferential trade and commercial status, although U.S. business warns this hardly helps Hong Kong.

Canada has deep historical ties with Hong Kong. Canadians died in the defence of Hong Kong in 1941. We have deep trade and investment interests. Hong Kong ranks third as a global destination for Canadian exports of services and is Canada’s second most popular destination for investment in Asia. With at least 300,000 Canadian passport holders, it is our largest foreign expatriate community outside the U.S. According to a 2011 report by the Asia Pacific Foundation of Canada, seven in 10 Canadians living in Hong Kong have family in Canada, and one in four retain Canadian professional credentials, with many having attended Canadian schools, colleges, and universities. Hundreds of thousands of Canadians have family ties in Hong Kong. If things go badly, Canada will have to relocate not just our expatriates, but share the burden to give right of abode to those amongst the 7.5 million Hong Kongers with Canadian connections.

Meanwhile, there is China’s renewed threat of re-unifying Taiwan by force — either through a direct assault, blockade, or some kind of hybrid attack involving kinetic, cyber, and political warfare. This would be tragic and bloody. Taiwan has become a vibrant democracy with no interest in Beijing’s ‘one country, two systems,’ as voters underlined again in the recent re-election of President Tsai Ing-Wen.

Our immediate objective is freedom for Michael Spavor and Michael Kovrig. Unfortunately, whatever the outcome of the Meng Wanzhou extradition process, the Chinese appear determined to hold them hostage for the long term. We need to keep up the pressure for their release and continue pressing the U.S. to help us free the two Michaels and remind them that their plight is a result of the U.S. extradition request.

If freedom for the two Michaels is our primary policy objective, our overriding priority must be to help avoid superpower armed conflict between China and the U.S. In his book Destined for War, Harvard’s Graham Allison observes that when rising powers confront ruling powers, there was bloodshed in 12 of 16 historical cases, what Allison calls the ‘Thucydides trap’. Canada and others would be collateral damage, so we must collectively look for diplomatic solutions.

Given Chinese sensitivities, this means avoiding demonizing China, but this also means no free pass on its international obligations, especially its commitments of ‘one country, two systems’ for Hong Kong. The Chinese Communist Party does not share our values, and their agents actively engage in subversion and disinformation. We need to be firm in pushing back and equally firm in speaking out when China flouts its international obligations or takes aggressive action against Canadians and Canadian interests.

China’s rise raises big questions for the West and for Canada. We needed China to grow, so that our own economies could continue to grow. This was the gift of globalization. But if China is now a competitor and adversary rather than a partner, then where does that leave us? We need to understand where China is at any given time on the spectrum from competition to crisis to conflict, and what those triggers and would responses look like. Are we prepared to continue to resource their continued growth?  Can we afford not to?

‘Effective sanctions’ is too often an oxymoron. Tit for tat on trade will only harm Canadians. Naming and shaming are either water off the back of a duck or will potentially worsen the condition of the afflicted. But doing nothing looks weak or appears to be appeasement. So let’s think strategically and asymmetrically.

The lesson of the two Michaels and now COVID is western adherence to collective security is tenuous, especially without U.S. leadership. China’s aggressive behaviour will continue.

The words and actions of Donald Trump contribute to a kind of moral equivocation towards China and the U.S. Canadians do not like President Trump, and it colours their attitude to the U.S.  But China and the U.S. are not the same. The U.S. is our ally. China is not. We have got to work with all our allies including President Trump, recognizing that for him it is all about ‘America First’.  With this in mind,  Mr. Trump’s musing about bringing Australia, Korea, and India (not Russia) into the “outdated” G7 makes sense. We should act on it.

We learned a lot about peaceful co-existence with the Soviet Union during the Cold War, and these lessons need to be applied again, mindful that, like Russia, China is probably never going to adopt or respect western values. Official re-engagement with China is likely years away. For now, it will have to be Track Two dialogue.

So what can we do? It starts with ideas translated into tangible options and actions. Fashioning a China policy will be complex and complicated. It means identifying issues of common interest: managing pandemics, migration, nuclear proliferation, climate change, terrorism.  All of these issues and questions should be addressed by the House of Commons Special Committee on Canada-China relations. The menu of options that follows can help start those hearings:

This paper grew out of a presentation to an eminent British Columbia Roundtable. It was sparked by the question ‘Beyond words what can we do about China?’ It draws on recent CGAI Global Exchange podcasts with former diplomats and officials and conversations with our Fellows.

For more on Canada and China see: Paul Evans, Engaging China: Trudeau to Harper; Jonathan Manthorpe, The Claws of the Panda; Wendy Dobson, Living with China: A Middle Power Finds its Way; and David Mulroney’s Middle Power, Middle Kingdom: What Canadians Need to Know About China in the 21st Century. Read the Public Policy Forum’s Diversification not Dependence: A Made-in-Canada China Strategy.

On Hong Kong, the South China Morning Post provides a daily digest on events in China, Taiwan, and the rest of Asia. East and West: China, Power and the Future of Asia, former Governor Chris Patten’s account of his time in Hong Kong and his observations on China is excellent. Gideon Rachman’s Easternization: Asia’s Rise and America’s Decline From Obama to Trump is also recommended.

Look also at the work of the University of Alberta’s China Institute and the Asia Pacific Foundation. As well as respected think tanks Brookings, CSIS, Council on Foreign Relations, and the Lowy Institute in Australia.

A former Canadian diplomat, Colin Robertson is Vice President and Fellow at the Canadian Global Affairs Institute and hosts its regular Global Exchange podcast.  He is an Executive Fellow at the University of Calgary’s School of Public Policy and a Distinguished Senior Fellow at the Norman Paterson School of International Affairs at Carleton University.  A member of the Department of National Defence’s Defence Advisory Board, Robertson sits on the advisory councils of  the Johnson-Shoyama School of Public Policy, North  American Research Partnership, The Winston Churchill Society of Ottawa and the Conference of Defence Associations Institute  and the North American Forum. He is an Honorary Captain (Royal Canadian Navy) assigned to the Strategic Communications Directorate. During his foreign service career, he served as first Head of the Advocacy Secretariat and Minister at the Canadian Embassy in Washington and Consul General in Los Angeles, as Consul and Counsellor in Hong Kong and in New York at the UN and Consulate General. A member of the teams that negotiated the Canada-U.S. FTA and then the NAFTA, he is a member of the Deputy Minister of International Trade’s Trade Advisory Council. He writes on foreign affairs for  the Globe and Mail and he is a frequent contributor to other media. The Hill Times has named named him as one of those that influence Canadian foreign policy.

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