Trade

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday July 25, 2019

History the best teacher on dealing with China

While everyone’s attention has recently been focused on events of 50 years ago —i.e., the Apollo 11 mission —the world has continued to turn. Canada’s problems with China have not gone away.

So it might be wise to focus less on the moon than on more recent historic events. In May 1999, during the heat of the war in the former Yugoslavia, NATO accidentally bombed the Chinese Embassy there. Tensions between China and the U.S. escalated, negotiations to get China into the World Trade Organization failed, and it took some time for diplomacy to right itself. China joined the WTO in 2001.

The finance minister of Singapore at the time, Heng Swee Keat, took Bill Clinton’s secretary of state, Madeleine Albright, aside and offered a few words of wisdom. It was not in the best interest of the United States to adopt an adversarial stance with China. Heng had more significant pearls to offer Beijing: Tap western markets, western technology and western capital and develop your own economy.

Twenty years is not a long time, particularly not when dealing with China, which has always played a long game. But Beijing took Heng’s advice and we are watching that long game unfold. Over several decades now, China has made inroads in the West —in technology specifically — and dumped a lot of capital in the developing African countries.

China’s “Belt and Road Initiative,” launched in 2013, is yet another example of the country’s strategic goals: A trade infrastructure costing anywhere between $1 trillion and $8 trillion and involving 70 countries that will tie China to Europe and other Asian nations through a “belt” tying together China, Eurasia and Russia, and a maritime “road,” across several oceans and seas to the Suez Canal and up into Europe.

The plan is to end Chinese dependence on the United States. After decades of accumulating capital and technological knowledge, China is in a position to fundamentally alter the way global trade works.

Canada will, inevitably, be affected, especially if, as predicted, China expects the road part of its initiative to include an Arctic pass. This new Silk Road will not be the stuff of Marco Polo, which benefited the West immensely, but will be a huge boon to China and the allies it creates through the initiative.

All the more reason, then, that Canada must resolve its strained relationship with China sooner than later.

The present conflict stems from the arrest of Meng Wanzhou, a senior executive of Huawei, China’s big tech firm. She is wanted in the United States on fraud charges and, under a U.S.-Canadian extradition treaty, she is under house arrest here. China subsequently imprisoned two Canadian citizens and threatens to execute a third already in prison. How we got to this point matters less than how we get out of it.

International pressure, and a wider agreement involving the United States, could free the Canadians, get Meng out of Canada, and resolve this issue. That pressure can also see Canada, as a participant in dialogue with the 10 members of the ASEAN, using diplomacy within the organization to work with China on an amicable solution.

Canada must follow the advice of Singapore in 1999 and not adopt an adversarial stance with China, but at the same time it cannot be so naive as to think that an economic solution — like the U.S. imposition of tariffs — will work either.

China saw that move coming a long time ago and has been defending itself against it. Prosperity did not lead to a more politically liberal China. Ask the pro-democracy protesters right now in Hong Kong.

“A journey of a thousand miles begins with a single step,” Lao-Tze wrote 2,500 years ago. Canada must be careful not to trip. (Hamilton Spectator Editorial)