Front Burner - Stuck in the middle: Mark Carney in China

Episode Date: January 14, 2026

Mark Carney arrives in Beijing today to meet with Chinese President Xi Jinping. It’s the first time in nearly a decade for a Canadian Prime Minister to do so, and the stakes are high.Carney has to balance his handling of two problematic superpowers during these talks.On the one hand, he wants to double non-U.S. exports abroad in the next decade and China is the second largest market in the world. On the other, a closer relationship with China could set Canada on a collision course with a U.S. administration set on curtailing and containing it. Additionally, Canada must also contend with the national security threat China poses – from intellectual property theft or meddling in Canada’s democratic processes.Vina Nadjibulla is back on the show to discuss all of this. She’s the Vice President of Research & Strategy for the Asia Pacific Foundation of Canada.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

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This is a CBC podcast. Hey everybody, it's Jamie. So Mark Carney arrives in Beijing today to meet with Chinese president Xi Jinping, the first time in nearly a decade for a Canadian Prime Minister. The stakes are high because the PM has to balance his handling of two problematic superpowers. On the one hand, Carney has been clear he needs to double non-U.S. exports abroad in the next 10 years to peel ourselves from the Americans. China is the second largest market in the world. At the same time, a closer relationship with China could set Canada on a collision course

with the Trump administration set on curtailing and containing it. On top of that, Canada must also contend with the national security threat that China poses. I'm thinking of stuff like stealing intellectual property, or in the case of conservative MP Michael Chong, targeting a politician who criticized China. To talk about all of this and more, I am joined by Vina Najibu. She's back on the show. She is vice president of research and strategy at the Asia Pacific Foundation of Canada. Vina, hey, it's great to have you back on the show.

Thank you so much, Jamie, for the invitation. So just to start, how would you describe the purpose of this trip if you're Mark Carney? So from Prime Minister Carney's perspective, this trip is about economic cooperation, about deepening economic engagement with China in certain specific sectors, especially energy. and agriculture. It is part of his broader diversification agenda and reducing Canada's over-reliance on the United States. China is part of that equation, given that China is the second largest economy in the world and a big market for our agricultural products as well as for energy. Given everything that's happening also in Venezuela, I think energy definitely will be top of agenda. But of course, trade with China comes with a lot of complications and a big

Part of that complication today is the tariffs on canola, seafood, and pork that China has put in place in retaliation for the 100% tariffs on EVs that Canada had put in place a year and a half ago. We're listening to automakers. We're listening to workers. Matching a move by Joe Biden intended to protect domestic automakers. Let's spend some more time here digging into some of what you just said and just getting a sense of what is. actually on the table here during this visit. And so these tariffs that China has hit us with, canola, meal, peas, seafood, pork, what might come of that? Yes. So I think in the lead-up to the trip, officials have been managing expectations because the issue is so complicated, both politically here in Canada in terms of managing the interests of Ontario and the auto sector on one hand. We can't back down, as simple as that.

They want to come and open a big manufacturing facility and employ uniform employees. Well, let's talk. But don't be shipping cars in, not manufactured by Ontarians. And canola and Saskatchewan, on the other hand. Premier Scott Moe says his meetings with Chinese officials were more positive than he expected. I think there's a confirmation that China is very interested

and not looking back but looking forward and in recalibrating the trade relationship that we have and moving forward. But it's also linked to our discussions with the U.S., because our auto sector, of course, is fully integrated with the U.S. and Mexico. So whatever we do on the tariffs will be closely watched in Washington.

And the timing matters because we don't want to get ahead of those really sensitive discussions that are ongoing with the U.S. So it would be difficult for Canada to just drop these tariffs as China has demanded. In fact, the Chinese ambassador here in Canada months ago

said very clearly that China is prepared to drop their tariffs if Canada were to drop our EV tariffs. So if Canada removes the unilateral unjustified tariffs on Chinese products, China will also reciprocate accordingly. And if the EV tariffs are removed, then China will also remove the tariffs on the relatives on the relevant products of Canada.

Just to be clear here, we had placed these 100% EV tariffs on China alongside the U.S., as well as aluminum and steel tariffs. And then in retaliation, they hit us with canoil, meal and peas, last spring, this kind of stuff, right? Correct. Yes. And again, because our auto sector is integrated with the U.S., we acted in a lockstep with the Biden administration at the time. Now, I do want to point out, Jamie, that there are actual domestic interests for doing that as well. So in order to protect our auto sector, in order to protect national security concerns.

So there's a complex set of reasons why those tariffs were put in place. But obviously, a key element of that was the recognition of the fully integrated auto sector in Canada and the U.S. and Mexico. Right. So basically, if we can't remove the tariffs, then the question becomes, what can the trip accomplish on this issue. So what could progress look like? Maybe some reduction rather than having 100% tariffs may be signaled that the tariffs can be reduced on both sides. Maybe some kind of a roadmap to sort of negotiations that in the next, let's say, a few months, maybe before the next meeting between the Prime Minister and Xi Jinping, there will be progress on this issue. We can follow also

the example of the European Union. They have tariffs on EVs, but they're not 100%. They are basically between 17 and 45% on individual Chinese companies, auto companies, rather than kind of this blanket 100% tariffs. And they're also in negotiations, the European Union and China, on other mechanisms to address concerns around flooding the market and unfair competition by looking at things like price floors. So having a minimum price for the EVs to allow, Japan and U.S. and others to compete. In other words, this can be part of a larger conversation

here in Canada about the kind of auto sector we want to have, what our options are given the challenges with the U.S. And then as part of that also then engage with China as one actor, because we're also partnering with Japan and South Korea, as you know, both on the battery production as well as in the auto sector. So it can't be a quick decision. I think the Prime Minister and his team are right in not rushing to some kind of a quick decision on this, even though there is, of course, pressure given the situation with canola and farmers here in Western Canada. This year's harvest, once ripe with potential profit, is full of disappointment. Chinese tariffs on canola are continuing to push down prices,

with a nearly 76% duty on seeds imposed last month. The Scatchewan producers say they've lost, around $650 million since the tariffs came into effect. But I think we should be able to support those farmers with immediate relief programs, with diversification of their markets. So there are other things that can be done. Even going down the route of lessening the EV tariffs puts Carney in a bind here, like Doug Ford in Ontario is saying, don't even do that.

I'm absolutely 100% dead against this. I have not talked to the prime minister. Our auto industry is under siege over here. And the Americans do not want us to do that either, right? That's right. Which is why it's also important for the prime minister to focus on the bigger economic agenda. Because tariffs is just one piece of this broader relationship, economic relationship. He wants to focus on energy.

oil and gas as well as clean energy. So we should be looking at China in a much bigger sense here about what is possible, but also what should be off the table, what should continue to be off the table around sensitive sectors like artificial intelligence, like quantum, like anything to do with dual-use technologies that can be used by the Chinese military. So I think when it comes to China, we of course need to do more with them in some sectors, but we also have to be really careful not to become too dependent on them in other sectors. We're also learning this experience now with the U.S. Basically, the main takeaway of the last six months for Canadians and for many others has been over-reliance on anyone, be that U.S. or China is really risky and comes with

a huge cost and we need to do everything possible to reduce that kind of strategic dependence. Well, oil is a good example of that, right? Because we currently sell well over 90% of our oil to the United States, right? Wow. And so China is already a purchaser of our crude oil in LNG and we are trying to get more of it, of course, off to Asian markets. China was getting oil from Venezuela. There's now been a real wrench thrown into that. And so what do you think could happen on the energy front. Yes. So I think this is really a promising area.

As you mentioned, China was buying about 4% of its oil from Venezuela, and now there are question marks about that supply. China is buying about 1% of its oil from Canada. And there's been a real significant increase since 2024, mid-2020, when the expansion of TMX came online. and now Asia is becoming more of a market for us, and China is the biggest market within Asia for Canadian oil. And I have to note that LNG is also another area

where I think China would be interested. They're already part of the first phase of LNG Canada, and they would be interested in the second phase as well. So this is an area where our dependence is overwhelmingly on the U.S. So anything that we can do to reduce it would be welcome news. and we should be building the infrastructure that allows us to fully take advantage of the Asian demand. And you mentioned green tech to try to produce it over 75% of all electric vehicle batteries, globally, 80% of solar panels, 60% of the world's wind turbines. So I imagine like there's potential there as well, right?

Absolutely. So, and Prime Minister Carney has signaled that, that he wants to do more around green tech, around renewables. He also wants to have discussions with China on the overall climate agenda through multilateral institutions, recognizing that China obviously is the single largest emitter of green gas, but it's also, for reasons of its own energy security, is moving rapidly when it comes to renewables and electrification and technologies around batteries, also even critical mineral refining. So there's a lot that we could potentially do in the sector. One element to watch, Jamie, though, will be the U.S. factor, right? And the kind of investments that we could welcome from China in this sector. Some things might be fine, but some things will likely raise question marks if my reading of the national security strategy the U.S. launched in December is correct. Like what?

In that strategy, they speak about, well, first of all, return to spheres of influence and reestablishing U.S. preeminence in the Western Hemisphere. And they have especially singled out sort of critical infrastructure, ports, as well as critical materials like rare earth metals, and anything that they believe is sensitive or dual use. So, and of course, Canadian North and Canadian Arctic will be part of that. So I think we'll need to watch what kind of investments we're talking about, where in Canada, and we'll have to triangulate that. with our discussions with the U.S. The U.S.

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Discover how at BDC.ca.ca slash financing. BDC, financing, advising, know-how. The Chinese have certainly signaled that the Arctic is a top priority for them vis-a-vis Canada access to our Arctic. There are a lot of critical minerals there, the strategic. And so just elaborate for me a little bit more on what they want from us. and then the pitfalls. Yeah. So China has called itself a near-Arctic power,

even though they're about 900 kilometers away from the Arctic Circle. Very liberal interpretation of near. Indeed, indeed. And no one else, and certainly Canada and our other Arctic partners, we don't acknowledge that terminology of a near-Arctic power. But it also wants to become what it calls a polar great power by 2030 and is increasingly recognizing that the Arctic is becoming an important arena of great power competition. Competition for resources, which you mentioned, it's obviously very rich in these

critical minerals, as well as competition for shipping routes, because China, given global warming and ice melting up there, China is trying to use northern routes to essentially cut in have transit time between China and Europe in particular. So that's kind of on the economic side, but there's also obviously growing military concern on the part of U.S. and NATO since 2022, when China and Russia began cooperating much more closely in doing joint exercises, Coast Guard exercises, as well as naval exercises near Alaska, especially, sort of in the North Pacific, close to Arctic. There's been a real increase. And then we've also seen greater Russian exercises, especially sort of in the Baltic Sea.

So there's a lot more activity now in the north. And, of course, the U.S. and also other NATO partners and Canada as well are watching this closely. I mean, even this week you had reporting on CBC from NORAD commander talking about how closely they're watching the growing partnership between China and Russia in North Pacific near Alaska. but also near Canadian waters. So it is something that we'll have to pay attention to. When you speak about what kind of China wants, it has certain economic objectives in stabilizing or improving relations with Canada

around exports, around sort of research partnerships, but it also has political objectives. And I'm happy to talk about that if you'd like, and those have to do with the Arctic, but also with Taiwan and with South China Sea and with generally how Canada views its relationship with China and speaks about that relationship. Yeah, well, get it to that. Just tell me more about what they want from us in terms of our behavior, I guess, is what you're saying on the world stage.

Yeah. Yeah. Essentially, China often conditions improved economic relations or deeper economic engagement on political compliance and getting its partners to essentially agree to China's narrative, especially on what China defines as core interests or sensitive areas like Taiwan. The government of China sees Taiwan as a breakaway province, essentially, and it wants to unify Taiwan, including potentially with use of force, but of course preferably without. And the self-governing island of 24 million people, a democracy, is a partner of Canada, and we have important cultural and economic relations with Taiwan, which China would like us to really minimize, but they certainly wouldn't want us to engage in any way that signals that

we have an independent relationship with Taiwan. A good example of that would be what happened just this week with two liberal MPs cutting their trip short because they didn't want, quote, unquote, to confuse the messaging on this. Helena Jasek and Marie-France-Lalande were there as part of a parliamentary delegation, but with Prime Minister Mark Carney heading to China this week, they're cutting their trip short to, quote, avoid confusion. with Canada's foreign policy. In response, conservative foreign affairs critic Michael Chong says two liberal MPs cutting short a visit to Taiwan

because of pressure from government officials is nothing short of cowtowing to Beijing's authoritarianism. Conservative MPs were not asked to return home. And that's unfortunate because we should be able to do two things at once, stabilize our relations with the PRC, but at the same time we should continue to be able to do what we're doing with Taiwan, which is important people-to-people exchanges, commercial exchanges. Taiwan is a major manufacturing superpower. It's a major investor here in Canada as well.

And of course, it's also a democracy. And at a moment when democracies are under siege, both from President Trump but also from authoritarians in China and Russia and elsewhere, we have to stand together. And I think it sends the wrong message for us to kind of preemptively be this compliant, be this worried about upsetting Beijing at a time when we should really be focused on advancing Canadian interests, but also not forgetting Canadian values. You have just described this country that is willing to use coercion, economic coercion,

against us. The Canola Council of Canada says China has put a stop to all new purchases of canola seed. The move comes at a time of heightened tensions. between the two countries following the arrest of Huawei's CFO, Meng Wancho in Vancouver. They've not just done it to us. They've done it to Japan, the EU, Australia. And so, you know, can we walk and chew gum at the same time,

especially in this moment? Because clearly the prime minister and this government doesn't think that we can because they're being very tepid on Taiwan and we're basically hearing nothing about values or human rights. Yeah. I mean, I think we have to. We don't have a choice because we can't ignore China as an economic partner, especially in the current moment. We have to figure out a way to work with them and to be able to have constructive relations. But we also need to be able to stand up for what we believe and defend our values and not abandon our friends, Taiwan or in the South China Sea or Europe, because China is also an enabler of. of Russia's war of aggression against Ukraine. Without China's backing, Russia would have not been able to sustain this war for this many years.

I mean, I think it is a very complex relationship. And the only hope that we have of managing to do more than one thing at a time is if we start with clearly understanding who we're dealing with, especially when it comes to the Chinese Communist Party, having really strong understanding of our own red lines, and what we will and will not tolerate. And then working with partners, especially other democracies in Europe and in Asia, to have a coherent policy of simultaneously engaging with China, but also reducing our dependence on them.

So the work that we're doing on critical minerals through the G7 is one example of that. Minister Champine is in Washington, meeting with his G7 counterparts, as well as others from South Korea and also. Australia to continue to talk about how we will be building resilient supply chains on critical minerals so that we're not dependent on China for 90% of these inputs, which are really important for our technologies, but also for military use. The Prime Minister has acknowledged that this

will require deft diplomacy and focus and discipline, and I hope that he will succeed, because it is absolutely critical for us to be able to have construction. of relations with China. But we shouldn't do that at the expense of our national security. And we certainly shouldn't do that preemptively without even necessarily sort of Beijing saying something. Right. I mean, this Taiwan example from this week is just really puzzling. I don't think it was necessary, at least based on everything that's publicly available. Like they could have kept the MPs there, you're saying. Sorry? Yeah, they could have kept them there. The MPs they didn't. Well, they were already there. Yeah.

So and by coming back and making the statement, they're actually drawing attention to this issue, frankly. And they're creating more questions. So I'm not sure that they've avoided confusion because they said they tried to avoid confusion. If anything, this has created a lot more questions and confusion. Well, we've been talking a lot about the kind of problems with getting closer to trying to which there are many. And I also do not want to make this seem like this is an easy task. But, you know, is there any potential that you see for like a more stable relationship with China moving forward compared to the United States when you compare it to the United States? Well, I mean, I don't think we should necessarily compare China in the U.S.

Because our relationship with the U.S. is so much more comprehensive, right? I mean, we're so much more reliant on the U.S. when it comes to economic engagement, to security. We often say China is our second largest partner, but the gap between number one and number two is huge. We sell 76 percent of our exports to the U.S. and 5 percent to China, right? So it's almost meaningless. And I think the kind of relationship that we want with the U.S. and with China will be different. But at the same time, it is important for us to try to stabilize relations with China to see if a more pragmatic relationship is possible. That is certainly what the prime minister wants.

He feels that by having difficult conversations in private, he's able to better communicate with the leadership in Beijing, what Canada is willing to do and not willing to do. So we'll see whether that works. I mean, that certainly is what's on the agenda. But when it comes to the U.S., I mean, I think it's existential. We have to figure out how to move forward on Kuzma negotiations. We have to figure out what the future of NORAT and our continental defense will look like, what NATO will look like moving forward. And I think if anything, we need a little bit of time, right?

So even if the rupture, as the prime minister is saying, has happened, I think there still needs to be time for everyone to prepare, including in Europe and in Canada. And to build domestic resilience to withstand the shocks that we are now experiencing in the relationship with the U.S. And just on the U.S., are you bracing for some kind of response from Trump from them this week in response in response to whatever happens in Beijing? So, in depending on exactly what happens and what's agreed, there might be a reaction from Washington. but it's part of a broader set of unpredictable measures that Washington is now taken. I don't think we should base our decision solely on what happens in Washington because President Trump doesn't need a rational reason to announce some new punitive measure against Canada or Greenland or someone else.

So I think we need to stay focused on what's in Canada's national interests and stabilizing relations with China. I think we shouldn't move forward. further than the Prime Minister has in his language. He wants to stabilize, recalibrate the relations, have more pragmatic engagement. I don't think we should see this as a major pivot. It would be, I think, unwise to see this as Canada pivoting away from the U.S. to China. Instead, what we're hearing the Prime Minister say is that he wants to diversify relationships. He doesn't want us to be dependent on the U.S., but I don't think he also wants us to be dependent on China, which is equally unreliable.

It's part of a larger agenda, and we have to see it in that sense. We have been really U.S. and Europe focused for much of Canadian history, and that is understandable. But in today's world, for us to be effective for Canada to be able to advance its interests, but also to defend its values, we need to up our game. And we need to have a lot more engagement with all of Asia, China included. Okay. Vina, thank you. My pleasure. Thank you. Okay, that's all for today. I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow.

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