The Current - Does Canada need to reset its relationship with China?

Episode Date: March 25, 2025

News that China had executed four Canadian nationals emerged last week, just as the country imposed tariffs on a range of Canadian products. Given that, and the increasingly unstable world order, how should Canada be thinking about its relationship with China? Michael Kovrig, the former Canadian diplomat detained by China for more than a thousand days, explains why he thinks that country should be seen as both an adversary and a trade partner.

In Scarborough, there's this fire behind our eyes. A passion in our bellies. It's in the hearts of our neighbors. The eyes of our nurses. And the hands of our doctors. It's what makes Scarborough, Scarborough. In our hospitals, we do more than anyone thought possible. We've less than anyone could imagine.

But it's time to imagine what we can do with more. Join Scarborough Health Network and together, we can turn grit into greatness. Donate at lovescarborough.ca. This is a CBC Podcast. Hello, I'm Matt Galloway and this is the current podcast. Amid a trade war with the United States, Canada has been looking around for other trading partners in new markets.

We could look to the EU or to Indo-Pacific countries, but a big looming question is what to do about China. After all, it's the world's second biggest economy and Canada's number two trading partner. But the relationship has also been fraught, given China's human rights record, including revelations last week that the country had executed four Canadian citizens for drug-related offenses. So how should Canada be managing our relationship with China in an increasingly unstable world? To help answer this, I'm joined by two people. Michael Kovrig is a former Canadian diplomat and a senior adviser of Asia with the International Crisis Group. He was also, along with Michael Spavor, held in detention by China for more than a thousand days. And Lynette Ong is a distinguished professor of Chinese politics at the University of Toronto

and author of Outsourcing Repression, Everyday State Power in Contemporary China. Good morning to you both. Good morning. Good morning. Great to join you. Michael, thank you for being here And I want I just want to get you know Let's set the table here with the mixed messages that we're getting out of China first You know we learned that China had executed for Canadian citizens on these drug crimes

China also brought in tariffs, you know Canadian products including canola pork and seafood But a day earlier China's ambassador to Canada also gave a lengthy interview to the Globe and Mail and said China wanted to move forward with the relationship, even make a free free trade deal with Canada. So Michael, how should Canadians understand these, you know, seemingly contradictory messages? I think the first thing we Canadians need to do is start with thinking about what kind of economy does Canada want to have? Because the arrangement that China is offering is essentially sending Canada back to becoming

a natural resources and agricultural products exporter while China dominates the upper echelons of technology and manufacturing. It's going to make it very difficult for Canada to remain a G7 type advanced industrial economy. And so is that really the kind of trade arrangement that you want? As for why you have those seemingly contradictory messages, the Communist Party thought is all about balancing and reconciling contradictions. So the Chinese don't see that as a contradiction. It's simply behavioral conditioning.

If Canada behaves well, China will give it benefits. If Canada does things that China doesn't like, there will be punishments. And it's all about China is willing to move forward on its terms with Canada doing what it wants. Lynette, how do you see this? I mean, when China says we want to move forward together, to pick up on Michael's point there, is it on its own terms or is it saying let's move forward together? Sure, I think several things are happening. Number one, with Trump 2.0 and its unpredictability,

breaking of lines with a lot of Western nations, there's a vacuum, a big gap for China to fill. I think China sees that as an opportunity to foster closer relations with what used to be US close allies such as Canada. So that on the one hand. On the other hand, I think China also realizes that it has leverage on its side because of how Trump is behaving, right? So we have actually seen kind of contradictory behavior of China towards some inter-pacific countries, including Australia.

Since the, I think, election of liberal government in Australia, we have seen resumption of wine exports to Australia, but it has also seen, we have also seen kind of sending of navy troops around the coast in Australia. So contradictory behaviour, I think on the one hand, it does want to foster closer ties, but on the other hand, it also realises it has got leverage, so it doesn't want to kind of cave in too much. So I see that sort of duplication of behaviour towards Canada too.

Michael, to be blunt, do you see China as an adversary or a trading partner? The complex relationship we have now is that it's both. Economically speaking, Canada cannot afford to completely cut off all trade with China. Nobody's seriously suggesting that. What you need rather is careful restrictions on technology transfer. You need national security screening processes. You need to be careful about Chinese ownership of certain strategic industries, scientific and technical cooperation, critical minerals

and things like that while continuing to get what economic advantages there are for Canada from that trading relationship. But let's be very clear, okay, China's goals under the Communist Party are fundamentally hostile to Canada, to Canada's allies and to Western governments. It wants to become the most dominant power in the international system and it wants to dominate the commanding heights of technology and manufacturing. That's going to hollow out manufacturing in the West and that's a big reason why we're

seeing the Trump administration behaving the way it is. A lot of this is driven by China and by a fear that if you hollow out the US defense industrial base and that there's potentially a conflict with China, the United States is not going to have the industrial capacity to compete. The US allies will not have the capacity by themselves. And so that is really what this is about. It's about maintaining manufacturing capacity and a defense industrial base in Western countries.

Let's look at one particular example, Lynette. One of the things the Chinese ambassador brought up in that Globe and Mail interview was Canada's 100% tariffs on Chinese electric vehicles. He accused Canada of blindly following the US on that. So given the current relationship with the Trump administration, which is obviously complicated, should we be rethinking our tariffs on Chinese EVs as an olive branch? So let's think about why we applied tariffs on Chinese electric vehicles in the first place. I think we did, we did that during Biden's administration, right? Um, at that time we were still a close ally with the, with the United States

and we were partners on security, on trade, on commerce, a whole range of other things. And all of that has changed. And all of that has changed. So perhaps there's a need to think about whether imposition of tariffs on Chinese electric vehicles will still serve Canada's interests. I think what's happening in Windsor with car, with automobile producers will not change given the imposition of tariffs on Chinese EVs. But if we, let's say, reduce the tariffs or take away the tariffs, it will benefit Canadian consumers.

So I think on the net basis, it will be beneficial to Canadian welfare, at least on the consumer front. On the producer front, I think much depends on trade war with the United States. Michael, what do you think, just in terms of EVs, as a small example of a complex relationship with China? So I've agreed with just about everything Lynette has said so far, but I think I would nuance that last point. If you take a look at the American and European responses so far to electric vehicles, right? China has a massive state subsidized industry in electric vehicles. It's on track to completely

dominate that. The EU went through a long drawn out process and came up with some modest tariffs on them. The US put a hundred percent tariffs on them. What's going to happen next? China is going to have massive overproduction of those vehicles. They won't really be going to the United States. Where are they going to go? They're going to flood European markets. They are going to flood global South developing country markets. And if Canada lowers its tariffs, they're going to flood the Canadian market. Now, sure, again, from a climate change perspective, that would help Canadian consumers have electric vehicles. But what's that going to do to Canadian industry?

It's going to completely hollow out not just electric vehicles, but all the rest of the supply chain and industrial base around that. Is that really the Canada that we want to build toward? And secondly, if the Canadian market becomes open to electric vehicles and potentially to other Chinese exports that the US market is closed to, Do you think the Americans are going to do nothing about that? How are the next KUSMA or USMCA trade negotiations going to go if Canada starts moving toward a talk of a free trade agreement with China or otherwise opening its market? The United States is going to react to that and I do not think

that reaction is going to be favorable. In Scarborough, there's this fire behind our eyes. A passion in our bellies. It's in the hearts of our neighbors. The eyes of our nurses. And the hands of our doctors. It's what makes Scarborough, Scarborough. In our hospitals, we do more than anyone thought possible. With less than anyone could imagine.

But it's time to imagine what we can do with more. Join Scarborough Health Network and together we can turn grit into greatness. Donate at lovescarborough.ca At Desjardins, we speak business. We speak equipment modernization. We're fluent in data digitization and expansion into foreign markets. And we can talk all day about streamlining manufacturing processes because at Desjardins business we speak the same language you do business So join the more than 400,000 Canadian entrepreneurs who already count on us and contact Desjardins today

We'd love to talk business We'd love to talk business. Michael, I just want to follow up. Given what happened to you in China, you're imprisonment in there for more than a thousand days, a story well known by Canadians. And then you have the executions of these four Canadians. How worried should Canadians be about traveling or doing business in China right now? Canadians should be very careful about traveling to China. The realities for the average business person or tourist, the risk is probably very low.

But how low does the risk of being potentially detained or banned from exit from China have to get to make it worth it for you to go there just for fun or to do some business? The risks are real because the decisions about that kind of thing are arbitrary and the Chinese security state is increasingly repressive and intense on it. It's particularly risky, unfortunately, for ethnic Chinese Canadians who in many cases the Chinese Communist Party does not treat as true foreign citizens, as we've seen, for example, with the recent execution of four Canadian citizens who also happened to be ethnic Chinese.

The Chinese government essentially treated them as belonging to it and Canada not really having a say with what happened to them. In many cases, such citizens may not even receive consular access or China will very flagrantly violate consular agreements. In my case, for example, consular agreements were routinely violated. So you're talking about a government that does not honor even treaties and agreements that it's made. The Canadian government just recently updated its travel warning for China.

So I would encourage anyone contemplating to China, going to China to read that travel warning. They should also read a new handbook put out by a group called Safeguard Defenders that is analyzed in detail the risks. It's called Missing in China and it's got a lot of advice both on travel to China, but also if your loved one becomes trapped or disappears in China, how you can help them. Lynette, what do you think? Travel to China. Should Canadians be concerned given the recent executions for Canadian citizens? I think, I don't like, if you have not done, you know, conducted any, you know, dangerous

business deals with China, have not written anything that is potentially embarrassing to the Chinese Communist Party as a tourist, as a business person. I don't see the risk of going to China as any higher than let's say going to the United States or other countries. I mean, yes, China does arbitrarily detain Canadians, as with Michael and other people, it has happened before. But also China now has pretty open policies towards tourists.

It has extended visa fee travels to a bunch of countries. I think the PRC government's attitude towards tourism has changed quite dramatically in the last 12 to 18 months or so. It is still in authoritarian countries. It does arbitrary detention from time to time. I'm not going to deny that. But I think things are also changing. I guess the whole conversation we're having

is really under the umbrella of the idea of this policy of engagement and whether this is still realistic. That opening up trade with China would make it more open to liberal and Western values like democracy and human rights. Lynette, is that even a realistic proposition in 2025? I don't think that is a realistic proposition. And I think, you know, U.S., among other countries,

has actually pushed for China's admission to the WTO back in the 2000s, hoping that by making China more open in terms of trade, it will become more like a democracy. But what has happened is actually China has gone the other way. Once it becomes more prosperous, it has more chips to do what it wants. In Xi Jinping's case, under Xi Jinping, he has become more authoritarian. But even that, I think I would suggest that, you know, I think we need to

rethink and recalibrate Canada's relations with China. Particularly under 2.0, we need to think about, I think long gone are the days of kind of doing things just based on ideology, because we are part of Western alliance, this is what we should do. I think we should think about things on an issue by issue basis, sector by sector and industry basis. We are at the very changing times, I think. I would look at, you know, agricultural products trade differently from EV trade, depending on whether we are competing head on with China on electric vehicles. If we are not, I would also weigh the welfare of producers versus the welfare of consumers. I would think about politics differently from economics, different from trade, really.

Michael, what do you think? Is the policy of engagement, is that still realistic? Engagement died many years ago. That's the sad reality. We're kind of just waking up very slowly to it. So I would foot stomp what Lynette has been saying. Again, what I would add to that is that I think while one needs to look sector by sector and have different approaches to different economic sectors, I think Canada does need to formulate.

Whoever forms the next government of Canada needs to have a China strategy. Whether it's a publicly announced one, I think some elements of it need to be publicly announced so that there is an understanding in the business community and the Canadian public of what's the general approach and framework. Other elements of it in more details can be internal to the government. But you need a basic concept that balances Canadian values with Canadian national interests, that looks to strike the right balance between economic benefits and national security and also human rights and human security. One of the key things to understand is it's not just about sort of feel good concerns about,

let's say Tibetans or Uyghurs or other oppressed minorities in Canada. It's about understanding the behavior of the Chinese party state and that the way it treats Hong Kongers, for example, is a preview of how it will treat other people that are under its domain and control. It's about having a strategy to manage Chinese transnational repression of minorities in Canada, electoral and political interference in Canada, cyber security, espionage, all the problematic things that the Chinese state is doing that didn't get talked about in that Globe and Mail interview. And I laughed out loud reading the transcript of that, frankly. It's a wonderful exercise in propaganda that doesn't give a straight answer to most of

the questions posed. So Canada needs a comprehensive strategy to deal with these issues. Lynette, last word to you. Yeah, so I would agree with Michael. I would think about three things. Number one, our values. Our values are very different from the Chinese, and we should bear in mind that the PRC government is still very unpopular in Canada. You know, opinion polls

after opinion polls have shown that. Number two, I think we should go out there and behave confidently as a middle power, right? Behave in a way that is in accordance with our power. And number three, pragmatism. I think this is the age for pragmatism. We should think about what is really in our interests and in our values. I agree that the age of engagement is long gone. I think we need to take a pragmatic approach towards our relations with China. A healthy debate. I hope our policymakers were listening. Thank you both.

Thank you. Thank you. Lynette Ong is a distinguished professor at the University of Toronto. Michael Kovrig is a former Canadian diplomat and a senior advisor for Asia with the International Crisis Group.