What issues should PM Harper pursue on his upcoming trip to China?

Canada and China cooperate in domains including health, environment, natural resources, education and energy. It is in the interest of both countries that this cooperation be strengthened. For China, Canada is a source of abundant natural resources and advanced technology. For Canada, we are only just beginning to understand the economic, political and cultural upheaval that China will cause in the 21st Century. China will become the number one economic power in real terms in about 10 years. Also, in a few years China may become the greatest scientific power. Its culture may become as pervasive as American culture and international organizations like the WTO will be increasingly influenced by Chinese legal norms.

The international place of Canada will be more and more linked to its relation with China. Particular efforts in Canada must be made in the domain of education and knowledge about China. The Chinese people understand Canada better than the Canadians understand China. A huge number of Chinese speak French or English. Many have studied in the best universities and have done internships in established businesses. The Chinese have an immense advantage in comparison to Canadians- they understand our market well. It is crucial to significantly increase the number of Canadian students in China, to favor the teaching of Mandarin, and to help establish Canadian internships in China. It should be for future generations of Canadians that Mr. Harper visits China.

Yet, China poses particular challenges to Canada. For example, how can Canada increase technological exchanges with China when the security agreements with the United States limit these types of activity? Perhaps there will be an opportunity to explore measures that mutually reinforce confidence in the domains of science and technology. Also, how can we adapt our commercial laws so that our businesses benefit from as much flexibility as their Chinese counterparts? How can we help our engineering, manufacturing, and service industries to profit as much as possible from Chinese investments? The Chinese experience might inspire us.

The questions of human rights will surely arise, but rather than undertaking an all ranging speech, questioning the liberties of Canadian journalists in China will surely be more constructive. Why are Canadian journalists subject to so many restrictions in China when Chinese journalists are free in Canada to report as they wish?

Through its relations with China, Canada is in the process of deciding its future in the 21st Century. While many subjects can be discussed with the Chinese authorities, we should ask ourselves more seriously how to adapt to this new world that will be dominated by China.

In a 2009 cover of The Economist, “How China Sees the World”, Canada appears as a small iceberg-like plot, dwarfed by an oversized Statue of Liberty and hemmed in by tiny Japan. Tongue firmly in cheek but there is a kernel of truth here. As many close to Ottawa have been saying for years, Canada has something of a visibility problem in China.

This was recently brought home to me during a research trip in China with a German colleague. We traipsed around Shanxi province looking at how local governments were responding to national plans to “green” economic growth. What surprised me was that almost everywhere we went, local officials had a story about some form of technical cooperation with German government agencies, firms or universities who were helping local governments to change lanes from coal-dependence to a sustainable, diversified economy. We didn’t hear any such stories about Canadian organizations.

On his upcoming visit to China, PM Harper will focus on building on the momentum that has been restored to Canada-China relations in the last couple years. Some are also anticipating a breakthrough on the Foreign Investment and Promotion Agreement negotiations as well as progress on energy talks. This is immensely important but we will also need to do much more to restore our visibility in China.

The real work should start at home. Successful summit meetings can generate valuable goodwill but without sustained efforts to deepen cross-national ties below the level of high politics, the relationship will remain superficial at best—like acquaintances at a party who exchange pleasantries and eventually drift away in search of their real friends.

As Wendy Dobson recently argued, to deepen the Canada-China relationship, the example of Australia is a good one to follow. Following a strategic review which concluded that there would be many positive-sum gains for Australia in Asia’s rise, the government devoted vast resources to improving the country’s level of Asia literacy. In 2020, the government aims to have 12% of graduates fluent in an Asian language.

There is much to be gained from thickening our connections to China. As Beijing works to forge a greener economy, Canadian expertise in areas such as renewable energy will be increasingly in demand. There are also opportunities for our governments to learn from the wealth of policy innovation currently taking place at local levels in China.

Finally, drawing closer does not imply that we must turn a blind eye to the ugly sides of present-day China. On human rights, for example, we would be much better placed to have an influence if we had an inside track on China’s complex domestic politics; quiet diplomacy which strengthens the hand of reformers is likely to be much more effective than finger-wagging from afar.

With an official visit this month, Prime Minister Harper has the opportunity to defrost Canada-China relations and lay the groundwork for stronger ties with the incoming sixth generation of Chinese leaders. With Canada’s traditional trading partners, the U.S. and E.U., suffering from anemic growth and mired in instability, the impetus for diversifying trade and investment patterns is plain to see.

In thinking more broadly about the long-term welfare of Canadians, however, Mr. Harper should concentrate his efforts on crafting partnerships where the Chinese are uniquely positioned: the manufacturing sector. The likelihood of persuading an oil patch Prime Minister to support Canada’s manufacturing sector could be like trying to get children at Halloween to eat their vegetables, but politics aside, the economic and social case for doing so is strong.

Economically, the belief that advanced economies no longer need to manufacture and can flourish as a hub of design and innovation ignores the fact that innovation comes not only from making new products, but also from developing new processes. A de-industrializing economy without an infrastructure for advanced process engineering and manufacturing will essentially lose its ability to innovate. Socially, the manufacturing sector has proven to be fertile soil for the formation and growth of the world’s middle classes, which often acts as a bulwark against inequality in society and ultimately is a key factor in the quality of a nation’s democracy.

As stated by Mohamed El-Erian, CEO of PIMCO one of the world’s largest bond investors, the idea that a finance-dominated economy is a natural stage in the maturation of post-industrial societies is simply a flawed vision.

China is indisputably the factory ‘workshop’ of the world. The question Mr. Harper must ask himself is: will China continue to be this low value-added workshop of the world forever? This question remains highly contentious, and until recently the conventional wisdom assumed that China would perpetually be a maker of low-end textiles and shoe exports. However, more recent research by the Economist Intelligence Unit, and the Boston Consulting Group, among others, suggests that China is gradually moving up the value-chain to increasingly encroach on product categories where developed countries have traditionally been dominant, such as in construction equipment (ex. cranes, cement trucks, pumps, earth-moving equipment) and other heavy industry sectors (ex. electricity generation, tractors, trucks, cargo ships).

China’s industrial ambitions remain a work in progress, but there are distinct signs of progression. A narrow focus by Mr. Harper on expanding energy exports would be wasting a very rare opportunity for Canada to not only tap into the dynamic growth of a leading emerging market, but to address structural weaknesses in its own economy by deftly leveraging China’s development ambitions in its own favour.

Daniel is the author of a NSI occasional paper titled, "Canada-China Economic Relations:Beyond Petroleum". 

The PM’s upcoming trip to China should address trade and investment, the environment and of course, human rights. I don’t pretend to know everything about these issues and speak from my experience as a first-generation Chinese-Canadian who now lives and works in Hong Kong.

Trade and Investment

Bilateral trade and investment is crucial for Canada and China and it is important to identify and discuss risks such as real estate inflation in Canada, supposedly due to heavy purchases by Chinese buyers on the West Coast, and investments by Chinese state-owned enterprises (SOEs) in Canada’s natural resource sector. I don’t believe the solution is to ban investment in either scenario but it is important to address and discuss them. Countries are, at the end of the day, realist states that look out for their own self-interests; it’s better to know what they are to seek a mutually beneficial outcome.

With growing trade and investment also comes a myriad of business-culture differences. Both sides need to step up law enforcement to prevent corruption and bribery in business and government transactions.

Environment

China and Canada are working towards environmental stewardship within their borders. This is an area where I see huge potential for information exchange and education. First, China is investing tons of money into its green sector, including renewable energy and new technology. Can Canada improve its track record in this area?

Second, Canadian schools and communities generally have a high awareness of environmental issues and grassroots movements are a lot stronger than what I see in China. China could learn a lot from the ways Canada incorporates environmental care into citizens’ consciousness from a young age. Increasing the number of environmental collaborations, whether it’s in clean energy research or in educational knowledge exchange programs, should be a priority for the Canadian government.

Human rights

The PM should continue to make a strong stand on human rights and should not under any circumstance cave in to Chinese pressure, even if it means losing some economic benefits. Cutting China slack on its human rights record benefits nobody, least of all China. For a country that lacks proper checks and balances, external pressure to comply with international human rights standards is the only way forward.

However, Canada should avoid direct commentary on any regional independence movement or leaders as that would be seen as meddling in China’s domestic affairs, which has never resulted in anything constructive. China has a lot to learn in terms of how to be inclusive in the true meaning of the word and Canada, as an immigrant country that has included many ethnic, religious and cultural groups into its mix, can share its experiences with China.

Anran is a recent graduate from the University of British Columbia with a major in International Relations and minor in French.