Canada’s China effect
As trade grows, relations become more complex and rights become an issue
Peter Goodspeed, National Post
Published: Saturday, September 29, 2007
After years of quietly chiding the government of China on human rights, Canada has taken a tougher tone under the Conservative government of Prime Minister Stephen Harper. In the last of a series of stories examining the relationship, National Post reporter Peter Goodspeed looks at the growing ties in trade and immigration between the two countries.
The China factor is changing Canada. It’s also changing our relations with the rest of the world.
Thirty-seven years ago, when Canada first opened diplomatic relations with the People’s Republic of China, the two countries had little in common except wheat sales and idealistic talk of developing a dialogue between the prosperous “North” and the less-developed “South.”
Today, Canada is home to more than one million Chinese immigrants; Chinese is Canada’s most widely spoken language after English and French; Vancouver and Toronto host North America’s most vibrant Chinese communities; and China is Canada’s second-largest trading partner after the United States.
“China is no longer out there,” says Paul Evans, chairman of the Asia Pacific Foundation of Canada. “It is here — the sharp edge of globalization and a daily economic presence for most Canadians. It affects what we produce and consume, the nature of our jobs, and our role in the world.
“The road to solving the world’s big problems, from global climate change to UN reform, to human security in Darfur, to the weaponization of space, to global counter-insurgency, still runs through Washington, but it now runs through Beijing as well.”
Over the past two decades, as economic reforms lifted more than 400 million people out of extreme poverty, China transformed itself and the global economy. At the same time, Canada’s relations with China grew increasingly multidimensional and complex.
The events calendar at the Canadian embassy in Beijing underlines the point:
Early next month, the Chinese Cancer Institute will stage its eighth annual Terry Fox Run in Beijing as hundreds of runners jog through Chaoyang Park.
This week, the Alberta Ballet Company wound up a tour of China, while earlier in the month the Cheremosh Ukrainian Dance troupe from Edmonton and Blackfoot Medicine Speaks, an aboriginal culture group from Alberta, appeared in seven Chinese cities.
In recent weeks, Raymond Bachand, Quebec’s Minister of Economic Development, and Gerald Tremblay, the Montreal Mayor, led trade delegations to China, while Kelly Lamrock, New Brunswick’s Education Minister, met Chinese officials in Beijing, Shanghai and Shenzhen to discuss providing Canadian curriculum for Chinese schools.
Canada’s seafood industry staged cooking demonstrations in which top Chinese chefs vied to find innovative ways to prepare high-quality Canadian products. Last year, China was Canada’s third-largest market for lobster, shrimp and other seafood.
This month, the Saskatchewan rock band The Blood Lines starred at the Beijing Pop Festival.
As China prospers, Chinese have begun to travel and China has become Canada’s 10th-largest source of tourists.
It is also Canada’s second-largest source of foreign students. The University of British Columbia has seen enrolment by Chinese students grow tenfold in recent years.
China’s appetite for natural resources, energy, professional services, skilled labour and modern technology is enormous and Canadian businesses like to think they are well-positioned and eager to meet its needs.
So far, however, trade between the two countries has been lopsided: Imports of Chinese goods are four times larger than Canada’s exports to China.
Still, the potential for growth is great. Most of Canada’s large financial institutions are poised to cash in as China prepares to reform its financial markets and emphasizes pension reform in a bid to create a “harmonious society.”
Thirty-four Chinese companies are listed on the Toronto Stock Exchange’s equity exchanges and up to 21 companies based in Canada have most of their assets in China.
Meanwhile, the Montreal Exchange is working with the Shenzhen, Dalian, Zhengzhou and Shanghai exchanges to help develop derivatives markets.
But despite a general broadening of Canada’s relations with China, the countries’ relationship is plagued with problems.
Canadian business is alarmed by the growing trade deficit and shrinking Canadian exports. There are problems with piracy, copyright and property rights. There are increasingly vocal allegations of Chinese espionage and there have been repeated clashes with China over human rights.
The Conservative government in Ottawa has changed Canada’s emphasis in discussing human rights with Beijing by making its criticisms public, rather than confining
them to polite diplomatic exchanges in private.
Four months after being elected in January, 2006, it accused China of industrial espionage when a Chinese state-controlled telecommunications company pre-empted Waterloo, Ont.-based Research In Motion’s introduction of the BlackBerry to China by suddenly unveiling its domestically produced “RedBerry.”
RIM had spent more than two years trying to break into China’s wireless market, but had been stymied by delays over negotiations and regulatory obstacles.
About the same time, the head of the Canadian Security Intelligence Service told a Senate committee hearing China was the chief target of his department’s anti-espionage operations.
China was identified as the “most aggressive” nation trying to illegally acquire Canadian technology, targeting nuclear, aerospace, biotechnology, mining and oil and gas sectors of the economy.
Peter MacKay, the foreign affairs minister at the time, said there was “growing and concrete evidence of a massive Chinese network actively spying and reporting on the activities of Canadian citizens and engaging in economic Cold War activity.”
Some experts claimed Canada could be losing up to $1-billion a month in lost contracts, jobs and markets as a result.
Canada’s relations with China deteriorated further when Mr. Harper’s government took up the case of Huseyin Celil, a Canadian citizen of Uighur-Muslim origin from Burlington, Ont., who was arrested during a family visit to Uzbekistan and deported to China to face dubious charges of terrorism.
China held Mr. Celil for more than a year without consular access, refused to recognize his Canadian passport and sentenced him to life in prison after a 15-minute trial.
Mr. Harper has taken a personal interest in the Celil case, raising it with Hu Jintao, China’s President, in two brief and frosty meetings during economic summits in Vietnam last year and this summer in Australia.
The confrontations did nothing to move the Chinese, but they have resulted in Canada giving a higher and more public profile to human rights concerns in diplomacy with China.
This year, a House of Commons subcommittee studying relations with China concluded, “It is time for a more fundamental rethinking of the purpose of government-to-government meetings and of their role in a broader Canadian policy of engaging China on human rights.”
It recommended permanently suspending the annual private meeting Canadian diplomats held with their Chinese counterparts to discuss human rights.
That has concerned some Canadian businesspeople who insist Canada may be dooming itself to failure by overemphasizing human rights.
“If the focus is solely on human rights, our country runs the risk of never establishing the kind of relationship in which difficult questions can be raised, discussed and settled in a mutually respectful way and in a manner that is likely to lead to change,” said Sergio Marchi, a former Liberal minister of international trade, now president of the Canada China Business Council.
“There is a growing popular resentment in China — and not just in China, of course — to lecturing by foreigners, in the absence of deep understanding of the Chinese realities,” Mr. Marchi said.
“Some fear Canada risks playing a game of chicken against a bulldozer,” said Mr. Evans. “They argue that it will be impossible to make progress on complicated consular cases and the broader human rights file without a working political relationship at the most senior levels.”
Although most commercial transactions with China are largely untouched by high-level politics, he fears a cool relationship with the country’s leaders could have economic consequences.
” [T]here are genuine concerns that some high-level commercial transactions do depend upon high-level government involvement, for example, in big infrastructure projects that depend on government procurement, and in the area of aviation and financial services, which are subject to government regulation,” Mr. Evans said.
But “human rights have to be a fundamental aspect of our relationship, which cannot be seen as separate from what is moving on the commercial and on the global issues side. That makes it a real challenge for a government to get the right balance and to move comprehensively.”
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