Canada-China Relations Reach an All-Time Low

According to veteran sinologist Bernie Frolic, in his reflective, personal work, “Canada and China: A Fifty Year Journey” when Canada and China agreed to establish diplomatic relations in the late 1960s, Chairman Mao turned to Premier Zhou Enlai and said, “We now have a friend in America’s backyard.” Over the years that followed, Canadians were led to believe there were periods when Canada enjoyed a “special relationship” with China. Chinese officials certainly encouraged this, referring on occasion to the relationship entering a “golden era.” Those days, if they ever existed, are now long past. Indeed, with the recent mutual expulsion of accredited diplomats over leaked CSIS reports about attempts by Chinese diplomats in Canada to intimidate a Member of Parliament, the relationship has sunk to an all-time low. Was this inevitable, and where do we go from here?

As Frolic points out, for the first twenty years after the establishment of diplomatic relations in 1970, Canadians were starry-eyed about the potential for Canada-China ties as China began its process of opening up. The relationship went through a period of steady growth and warming, including the establishment of a CIDA development assistance program for China, the first in a communist country by Canada. However, the shock of the Tienanmen incident on June 4, 1989 brought home to Canadians that the Chinese government and Chinese Communist Party (CCP) would not hesitate to use deadly force against its own people to stay in power. Tienanmen also began a long internal debate in Canada about how to engage with China and how, in particular, to address the thorny issue of human rights. 

In his book, published early last year, Frolic sketches out how the values/interests dichotomy has bedeviled Canada’s China policy ever since, swinging from full-on trade promotion where the words “human rights” were barely mentioned, during Jean Chretien’s “Team Canada” missions to China for example, to Stephen Harper’s initial shunning of China because of its human rights record.  Later, Harper would reverse his position, visiting China in February 2012 and signing a Foreign Investment Promotion and Protection Agreement that finally went into effect two years later.  From the late 1990s to the mid-2000s, China was even prepared to entertain a human rights dialogue of sorts with Canada. Little was accomplished but a form of dialogue existed. 

The most recent references to the emergence of a supposed new “golden era” in bilateral relations took place in 2015 when Justin Trudeau came to power. Initially there were expectations that negotiations toward a free trade agreement would begin. However, they foundered over China’s reluctance to embrace Canada’s “progressive” trade policy. That setback was mild compared to the fallout from the arrest of Huawei executive Meng Wanzhou at Vancouver airport on December 1, 2018 on a US Department of Justice warrant, and the subsequent retaliatory arrests by China of Michael Kovrig and Michael Spavor. 

Although the Meng/Michaels case was eventually resolved after the US dropped its extradition request, and China released Kovrig and Spavor in September 2021, since then bilateral relations have fallen even further. Recent polling shows that only 12 percent of Canadians have a favourable view of China. That is down from a 36 percent favourability rating in 2017. 

While the Meng/Michaels affair did damage the relationship between Ottawa and Beijing, and exposed China’s uglier side, had it not taken place a steady cooling of relations was almost inevitable given geopolitical realities, for several reasons. The first is that the much-touted special relationship, if it ever existed, was a passing phenomenon at a time when China still needed Canada and Canada had something to offer. The Chinese have never been happy with Canada pushing its values agenda, although they were prepared to tolerate dialogue around human rights issues for a while under the guise of an “exchange of views.” But that time has passed.  As China has grown in political, economic and military strength, the relative importance of Canada has waned along with China’s willingness to abide Canadian criticism of Beijing’s domestic human rights policies. 

Secondly, China respects strength and is not shy about throwing its weight around when it can. That explains the hard line adopted on Kovrig and Spavor, plus actions taken to target Canadian exports, in retaliation for Canada’s cooperation with the US in detaining Meng. Notably, China took no action against US interests because of Meng’s arrest, even though the US was the instigator. From a Chinese perspective, it was far easier to punish Canada, at the same time sending a warning message to any countries that may have been inclined to support US interests over those of China.

When it comes to trade, always a prime motivator for Canada, China has a 3:1 trade imbalance in its favour yet is much less dependent on Canada than vice versa. Even though China takes only about four percent of Canadian exports, those exports are important to western Canada and to the agri-food sector. China has a more diversified economy, exports worldwide and sends less than one percent of its exports to Canada. It is clear where the leverage lies. 

A third factor is the state of US-China relations. When China and the US were first building their relationship, Canada offered helpful precedents. When US-China relations were warm, such as when China entered the World Trade Organization in December 2001, it was relatively easy to expand Canada-China economic relations. In the current context, however, with China and the US engaged in a trade and technology “war” and increasingly seen by the other as a strategic and economic rival, Canada has little room to manoeuvre. The eventual banning of Huawei and ZTE from Canada’s 5G networks, announced by the Canadian government in May 2022, is but one example. 

All this is not to say that Canada should give up trying to find areas where Canadian and Chinese interests intersect. Frolic outlines how over the years, especially during periods when relations were strained, effort was focused on building and maintaining grassroots, people-to-people linkages while identifying specific areas of economic opportunity. Canada’s new Indo-Pacific Strategy, while promoting diversification of diplomatic, trade and institutional efforts to other parts of the region, also recognizes the global importance of China politically, economically and militarily for Canada and the need to maintain engagement when it suits Canadian interests. 

China, for its part, even though it now clearly regards Canada as a second-tier power firmly under the thumb of the US, still cares about Canadian policy and what happens in Canada. Its influence-peddling and meddling in the diaspora community is proof of that. Beijing, for example, targeted Michael Chong because of his criticism of its Uyghur policy in Xinjiang and is also concerned about anti-China activities by Hong Kong democracy activists, and supporters of Taiwanese or Tibetan independence, in Canada. 

Indeed, China will not brook what it regards as foreign interference in its domestic affairs. Therefore China should clearly understand why Canada also needs to take a firm stand to stop it from crossing the line from legitimate diplomatic activity in Canada to what David Johnston characterized in his First Report as “covert, deceptive and threatening” practices through which foreign governments “are undoubtedly attempting to influence candidates and voters in Canada.”

More than fifty years on from its diplomatic recognition of China, the investment that Canada made in building relations with Beijing has not turned out as expected. In asking “what went wrong?” perhaps the answer is “nothing went wrong; the world changed.” There were many factors; China’s political and economic rise compared with Canada’s relative decline in importance, China’s increasingly self-assertive, even aggressive policy positions, and the narrowing of Canadian options through a marked increase in US-China rivalry. 

What is needed now is a recognition of these factors in finding a new equilibrium in Canada-China relations, one based more on a mutual understanding of each country’s respective influence and interests than any form of special relationship.