Half of the things Canada produces contain at least something from China – that’s a fact. But that fact doesn’t mean we need to keep our mouths shut.
Canadians were at once overjoyed to see Michael Kovrig and Michael Spavor return home last weekend and appalled at how craven China was in pursuing its self-interests. No one wants Canadians to pay that price again, and it would be understandable if a fed-up Canadian public wanted the federal government to stop tiptoeing around China and take a harder line.
Canada, finally, has some room to manoeuvre.
After more than a thousand days of Canadian diplomats biting their tongues for fear of making things even worse for the two men stuck in Chinese detention because of a China-U.S. dispute over technological supremacy, we can at last express a little more of our collective misgivings about how China treats not just us, but also its dissidents and the Uyghurs.
We are constrained by our economic interests and our geopolitical power, to be sure, but not completely.
There’s no doubt that the economic future of China – and Canada’s potential to benefit from it – could hold promise. It is already our second-largest trading partner.
And Canadian businesses have been selling their wares to China like never before – despite COVID-19, despite the trade war between China and the United States and despite the chill on Canada-China relations exacerbated by the jailing of the two Michaels.
Canada’s exports to China rose 37.8 per cent in the first quarter of 2021 compared with a year earlier, surpassing pre-pandemic levels. And imports from China rose 32.3 per cent over the same time. We love Chinese technology, toys and textiles, and their prices keep inflation in Canada lower than it otherwise would be.
But before we get too carried away with all the potential for the business and consumption side of our relationship with China, let’s listen to the humanity side for a moment. Arbitrarily detaining Kovrig and Spavor for more than 1,000 days was just wrong, and the tactics China used against Canada to keep us at bay – the sanctions on Canada’s canola and meat products, for example – were unacceptable.
But we withstood those sanctions. And our economy is tough enough to withstand more pressure from China, if that’s where speaking out against arbitrary detention and in favour of human rights leads us.
A fascinating research paper for Global Affairs Canada looks at how dependent the Canadian economy is on China. In it, departmental economist Colin Scarffe pulls apart what bits and pieces Canadians buy from China, where their investment goes, and looks in detail at the options available to us.
As a country, we’re not as dependent as many would have us believe. Even when it comes to supplies needed to handle the pandemic, the office of the chief economist at Global Affairs found that the United States was the top supplier of 1,733 products, while China was the top supplier of 158.
The conclusion: Not everyone doing business in Canada has options, but most of us do if given time to plan.
We’ve already seen that approach in action regarding Huawei. Canada has taken years to decide whether to join our G7 allies in banning Huawei Technologies from our 5G wireless network, partly because of fear of retaliation and partly because of pushback from Canadian companies that already had Huawei technology integrated into their networks.
But in the meantime, those Canadian companies have been making other arrangements, Prime Minister Justin Trudeau noted on Tuesday. They figured out a way.
Batteries for electric vehicles are another example of building supply-chain resilience in the face of Chinese market domination.
Governments in both Canada and the United States are developing incentives to skirt China and mine the rare minerals needed to produce EV batteries in Canada instead. Canada is also supporting automakers to boost production of electric cars here. The goal is to develop North American capacity over time so that we’re not so dependent on China for products that will be crucial for our everyday lives as well as our long-term climate goals.
It’s not the aggressive decoupling from China that some in Canada want to see, but it is a practical step toward self-preservation.
Foreign Affairs Minister Marc Garneau is already showing signs of being more willing to take on China’s lack of respect for human rights. At the United Nations General Assembly this week, Garneau spoke out against China’s treatment of Kovrig and Spavor, and vowed to keep that travesty in the public eye – something China does not appreciate.
“Canada will never forget this experience and this lesson. We shall continue to press for an end to arbitrary detention, wherever and however it occurs,” Garneau said.
But if Ottawa does find its stronger voice on China’s transgressions, Canada needs to be prepared to support those who become collateral damage. Our universities and our agricultural sectors are vulnerable.
This will come to a head soon. Trudeau says he will make the call on Huawei within weeks. China wants in on the Trans-Pacific Partnership, where Canada has a veto. China is demanding that countries around the world disavow Taiwan’s independence.
Canada is not without power.
Heather Scoffield is a National Affairs writer.