Sino-Canadian relations: ‘Strategic Partnership’ II

After a long learning curve, the Harper government has decided to re-engage with Beijing.

Foreign Minister John Baird, centre, with ambassador David Mulroney and Chinese Foreign Minister Yang Jiechi last week in Beijing (July 18, 2011)

Jul 23 2011

John Baird, the new minister of foreign affairs in the Conservatives’ new majority government, chose China as the designation of his first official visit abroad last week. As one of the most powerful figures in Prime Minister Harper’s inner circle, Baird sent a clear signal to Beijing that China is back at the top of Canada’s foreign policy agenda.

This is a remarkable turnaround. In early 2006, when the Conservatives first came into office, they did not want much to do with Beijing. It took seven months for the Chinese ambassador to get his first meeting with then foreign minister Peter MacKay. The Harper government stopped using the term “Strategic Partnership” to characterize the bilateral relationship — the special status the Liberal government under Paul Martin had worked hard with Chinese President Hu Jintao to achieve in 2005. Ottawa suspended its human rights dialogue with China, saying it was not effective, but put nothing else in its place.

Harper himself not only refused to undertake any “Team Canada” style visits to China, as Jean Chrétien and Martin had, he suspended Canada’s summit diplomacy with the Chinese leadership by not going to Beijing for nearly four years.

As a result of this policy of disengagement on all fronts, Canada had little means to deal with China on global issues, contributed little in promoting human rights for the Chinese people, and our share of economic and trade relations with the fastest growing economy in the world lagged (although in absolute terms bilateral trade has grown). Australia, a country with just over half of Canada’s population, does nearly twice as much trade with the People’s Republic. And my extensive study of Canada-China energy relations demonstrates a clear correlation between the cool political relationship and the lack of Chinese direct investment in Canada between 2006 and 2009.

The 2008 financial crisis, the deepening trouble of the U.S. economy, growing domestic criticism and a more pragmatic Harper government finally realized that it was not in Canada’s interests to continue to ignore China. It has been a long learning curve. It took Harper’s first China trip in late 2009 and then Hu Jintao’s visit to Ottawa last year to restore bilateral ties to the state of “strategic partnership.”

But credit should go to the Harper cabinet for its consistent message to Beijing since 2009: Canada wants to forge a close economic relationship with China and Chinese investments are welcome as long as they benefit the Canadian economy and create jobs. Large Chinese energy and resource companies, which have taken note of the new tone, invested $14 billion in Canada last year alone, an unprecedented level. The trend has continued this year. China Investment Corp., the powerful Chinese sovereign wealth funds operator with $300 billion in it pockets, selected Toronto earlier this year to open its first overseas office. Although a $5.4 billion EnCana-PetroChina shale gas deal fell through, other large-scale investments have succeeded, including China National Offshore Oil Corp.’s $2.1 billion purchase of Opti Canada Inc., announced last Wednesday.

If the record of Canadian engagement with China over the past two years is any indication, a warmer political context is a necessary condition for closer economic and trade ties. But not a sufficient one.

Now that Baird has taken a proactive approach, there is hope the bilateral relationship will enter a new era. The saga of Lai Changxing, the fugitive wanted by China who fought for 11 years to stay in Canada, has finally come to an end. Lai’s deportation back to China will remove a sore point in the relationship. The just-concluded Council of the Federation meeting also set China as a priority, pledging an all-premiers mission to Beijing within a year.

These positive measures must also be accompanied by a long-term China strategy, at both the federal and provincial levels, as well as in the private sector. Canada needs a more robust domestic debate about the rise of China, the pros and cons of its investments in Canada and how to effectively engage China on the human rights front.

Baird was right when he acknowledged that it’s better to talk to the Chinese side about human rights issues rather than just “griping at home.” But he should back up his “frank discussions” with Beijing with tangible human rights programs. Ottawa should not treat trade and human rights as mutually exclusive goals. A visionary China strategy without ideological and partisan bias could enable Canada to pursue both trade and human rights goals simultaneously and effectively.