The Munk Debates Podcast - Munk Members-Only Pod: Episode 39

Episode Date: October 1, 2021

This is a sample of the Munk Members-Only Podcast. The program provides listeners with a focused, half-hour masterclass on the big issues, events and trends driving news and current events. The show features Janice Gross Stein, the founding director of the Munk School of Global Affairs and bestselling author, in conversation with Rudyard Griffiths, Chair and moderator of the Munk Debates. This week's Munk Members podcast focus on two important stories in the news. First up, the return of the “two Michael's” and what this says about the past, present and future of Canada's relationship with China and the brewing energy crisis in China and Europe. Janice and Rudyard discuss the three important takeaways from China's return of Michael Spavor and Michael Kovrig. Does the end resolution of this diplomatic crisis herald a reset in Canada-China relations or a return to closer ties? And second, as coal, gas and oil prices surge globally, are we collectively at risk of a 1970s style energy crisis? What will the effect be on inflation and the climate change fight as renewables struggle to keep up global power demand? To access the full length episode consider becoming a Munk Member. Membership is free. Simply log on to www.munkdebates.com/membership to register. Under your membership profile page you will find a link to listen to the full length editions of Munk Members Podcast. If you like what the Munk Debates is all about consider becoming a Supporting Member. For as little as $9.99 monthly you receive unlimited access to our 10+ year library of great debates in HD video, a free Munk Debates book, monthly newsletter, ticketing privileges at our live and online events and a charitable tax receipt (for Canadian residents). To explore you Munk Membership options visit www.munkdebates.com/membership. This podcast is a project of the Munk Debates, a Canadian charitable organization dedicated to fostering civil and substantive public dialogue. More information at www.munkdebates.com.Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

Hi, Monk podcast listeners. The following is a sample of the Monk members-only podcast. To access the full-length edition of this episode and all of our regular Monk members-only podcasts, go to our website, www.W.Munkdebates.com and register for membership. Membership is free, and it's available for you right now at www.munkdebates.com. Hope you enjoy the program. Hello, Monk members. Rudyard Griffiths here, your host and moderator. You're welcome to this, our regular Friday Monk members-only podcast. This is the program where we dig into some of the big issues and ideas shaping our world that have made news in the last week and could be important in the days and weeks to come to hopefully leave you with some new analysis and insights.

As our guide, we're exceedingly fortunate to have Janice Gross Stein. She is a founding director of the Monk School of Global Affairs, an internationally renowned scholar and author. and she's all ours for the next 30 minutes. Janice, great to be in dialogue with you once again. Great to see you, Richard, and now that we have left the election behind, time to talk about the world again. Exactly.

Well, we have to get your reaction, Janice, to the return of the two Michaels, a fascinating kind of backstory here, and a lot of questions now. remaining about where does Canada go from here in terms of its relationship with China and de facto, therefore, its position vis-a-vis the United States. And I guess I want to begin with you. We can talk a little bit more about Canadian positioning, but I really want to have your view as what's the lesson that we've learned here? This is a pretty big event. It's exposed

some maybe hard realities about Canada's own capabilities, our own. influence abroad, this much more challenging and difficult world we find ourselves in. So what's the top, let's say two lessons that you would take out of the end of this long, involved hostage taking? I really can't think of a better way to encapsulate what we've witnessed. So three big ones for me. The first one will probably surprise you, Goddard. Great diplomacy matters. Having highly skills, physical. domesticated diplomats in our arsenal matters. We had a superb ambassador to China, Dominic Barton,

reinforced in Canada by a great team and our ambassador in Washington, Kirsten Hillman. And they needed every bit of professionalism that they have. And this was superbly executed. I think it will go down. go down as a diplomatic triumph for this country. So that's number one. Okay, so let's have some fun here, because we can jump into these and kind of bounce your three things off each other. So my, let me challenge you on that. I mean, yes, we had high-level access

to the Biden administration. Yes, I assume there was conversations between Dominic Barton and his Chinese counterparts, but really nothing happened here, Janice, until Joe Biden, after the debacle of the United States as pull out from Afghanistan, decided that they needed to shore up their flank with China and began an effort, an exercise here, to de-escalate tensions with China. And I don't think there's any coincidence that that push, that move came on the heels of America's humiliation in Afghanistan.

So to equate this somehow to a diplomatic success that was brought about by Canadian agency, I don't know, it just seems like a stretch. Don't agree with you at all. A diplomatic tract actually opened under the Trump administration. And it was a complicated negotiation, which is not what most people think about when they think about diplomacy. Because Huawei, the company, was a prime participant in these negotiations. So this was government to business.

Those negotiations in which we were involved failed. And they failed largely as a result of the position. that Huawei took. This was our second go-round. Biden's involvement, contrary to what most people think, was minimal. There was a call between Xi Jinping and Biden. Giusei Ping raised the case of Meng Wanzhu, Biden's state's island. So contrary to what we heard in the Canadian press, it was not that Biden intervened on our behalf. Jiji Ping intervened on Mengu's shoes. Janice, you don't think that

Biden, through back channels in his administration, had his fellow Democratic operatives and colleagues talking to their counterparts in the Justice Department to settle what was a ridiculous charge that the Trump administration had brought against Meng Huangzhou and Huawei. As you in a previous episode, I thought very brilliantly pointed out, this would be the equivalent of, you know, Cheryl Sandberg landing on behalf of Facebook in Beijing and getting thrown in jail. This is China's biggest tech company. Yes, they were involved. It's China's equivalent of Facebook or more.

All right. Let's switch the camera here. Put yourself in the position of a successor to Donald Trump, Joe Biden, who interferes in the Department of Justice, where he leaves any fingerprints behind him. Death. They all do this. We do it in Canada. We just had an election that in part talked about the S&C scandal. We've got politicians leaning to the extent that they can within the boundaries of the law

to influence, I mean, that's why we have Democratic representatives running these institutions, not bureaucrats. I do not believe that that was the most important factor in getting us to where we went. Actually, there were two. One was our ambassador who long before Afghanistan imploded, went to Washington last April and spent three weeks putting a new proposal on the table, and it is a version of that new proposal that succeeded, and was our proposal.

It came from Canada to the DOJ. Secondly, and interestingly enough, Justice Holmes in British Columbia, if you were paying close attention to these extradition hearings, she raised a couple of really tough questions for Canadian prosecutors. And Boyd was Washington listening, and the prosecutor said, oh my goodness, although the bar is very low to get extradition across, judges don't usually ask those kinds of questions. And there's a bit of chill in the air.

And if you read the Washington Post in the New York Times who covered this case, by the way, there were two American hostages who were returned at the same time, which most of us have not paid a lot of attention to, that's what they were focused on. This was a common, here's where our diplomats were the game changers. They put the plan on the table in April that was ultimately accepted. That's ours to own and ours to win and ours to celebrate. Okay, well, it runs a big counter to what we've read in the press. I appreciate your alternative perspective.

That's why we do this podcast. Let's move on, though, to the precedent that's been set here. I think there's a lot of concern that, you know, China didn't even seem to have the good grace of waiting a decent interval a week to 10 days before returning the two Michaels. Instead, bam, there they were on the plane, literally hours after Meng Wenzhou's proverbial releasing of the handcuffs by the Department of Justice in the United States. Doesn't that suggest, Janice, two things. One, that the Chinese is sending a very clear message here. Yes, there was a quid quo pro here. This was a hostage taking.

And we're frankly going to rub your face in that. And then what does that say to the danger here going forward when effectively we have negotiated with hostage takers? We've met their demands. Doesn't this emboldened them again in the future? Why is that a successful outcome in terms of our longer, term national interests. So let's deal with the first question first. Biden had made clear, going back to the spring,

that as part of a deal for Meng Manchu, it was conditional on the release of the two Canadians and the two Americans. As I said, that was a part of the story that was not covered. Now, China should have resisted, frankly. It could easily have said, yes, we give you our word, we will release them, yes, we will, we will. be able to go, but we're going to wait a month. Because the optics of this made it crystal

clear to the most skeptical person that this was hostage diplomacy. So here's my second big lesson. What does this tell us about China? They don't care. They're comfortable with the fact that everybody will say China engages in hostage diplomacy. This is flexing of their muscles. And they're comfortable with that. They're not concerned about the optics. They're not worried about it. World set up, take notice. You mess with us in a big way. We're going to mess with you in a big way back.

And oh, by the way, especially if you're not a big power. And that, in a sense, is a price they're willing to pay. Now, as far as negotiating with hostage, every country in the world negotiates for their own hostages without exception. They do it in different ways. It takes shorter or lesser. Right. But they usually don't do that with a question.

Great power. Great powers don't usually, yeah, but great powers don't usually take hostages. We're usually dealing with terrorist groups. We're dealing with rogue states. Surely, Janice, this is a bigger precedent. It's a more important precedent that's been set here. Well, it's a more important precedent because the world's number two power is engaging in hostage diplomacy. That's the real worry for the rest of the world. So it's not only Canadians who need to worry. It's Germans. It's Italians. It's French. It's Indians. Now, from the Chinese perspective, by the way, the United States engaged in hostage diplomacy. So if you listen to the Chinese and you read the Chinese press, they will tell you that having Meng arrested, having the DOJ request her arrest and extradition was hostage diplomacy. But they didn't arrest to Americans and throw them in jail. They chose to arrest to Canadians.

Canadians because that's convenient because we're a country that they can ignore and push around. And that leads me to the kind of third leg of this stool that I want to discuss with you before we go to our next topic, which is where does Canada go from here? Because this is a government in Canada, the Trudeau government, that has struggled with different tensions on China. Generally, there is within the Liberal Party, in some ways Dominic Barton represents this, a powerful business interest, a business mindset towards China. China that has shaped a lot of liberal thinking on the extent to which we need a third option, a second option outside of the United States.

We have to expand here. Dominic Barton led McKinsey's practice in China, no small extent, before he was helping the Sackler family sell opioids to Americans. But we'll leave that to another day. The more important issue, though, Janice, is, you know, know, how do we proceed? I mean, isn't it clear that we really do have to align ourselves at this point with the United States? We may have a view of triangulation, but at the end of the day, we just got pushed around. We just got shown by the Chinese how little regard they hold us in.

Isn't it time to say, Huawei out, Canadian China Business Council, we're sorry, we're going in a new direction, and that direction will be led by an American global effort to push back and resist China's disruption of the international stage. So I can't think of a strategy that would serve Canada's interests less well than the one that you just outlined, Roger. I've been an expoement of Huawei out of our 5G networks for three years, as you know, and I'm very hopeful now that this issue's off the table. Huawei will not have any part in building our next generation digital infrastructure,

because I don't believe that we should ever allow somebody of China's reputation inside our most important digital highways of the future. I think it's just a colossal mistake. The Brits are not doing it, the Aussies are not doing it, New Zealand will not do it. we shouldn't do it either. And I think that fight is hopefully over. But let's look at the bigger picture here. Biden is in the protest of, as you mentioned, recalibrating his policy toward China. Yes, there will be absolute fierce competition across a whole range of international. But we're going to trade with you. We're going to slap tariffs on high technology where we're worried there's dual use and a security interest.

but we're going to engage with you, we're going to trade with you, and by the way, we want to work with you on climate change, and we want to work with you on pandemics, and a whole set of other issues. So just imagine if Canada adopts a whole year than now preaching, moralistic attitude, which, as you know, some things get you going, and what gets me going is when the preachers start running loose,

and we cut off our own nose just by our face. We're more American than the Americans. Why would we do that? We have to be sophisticated. We have to meet legitimate and important American security needs, which are our needs as well. And then we have to take advantage of an economy that will likely be the largest in the world in another 15 years.

Why would we cut ourselves off from that? Because, Janice, there is an historical analogy here that bad regimes emerge. There are people that wanted to trade with the National Socialist Germany of Adolf Hitler. It was seen as a highly dynamic and effective and growing economy. Why shouldn't we have a trading relationship with women? Why shouldn't we extend our resources, our intellectual capital, and share back and forth through the glories of international commerce?

Well, you know, that lesson ended rather cruelly in the Second World War. And I think, you know, we can't be naive about, you know, even all of us who hold ETFs and invest in China. Yeah. Let's be honest about what you're investing in. You're investing in a state that has destroyed democracy in Hong Kong where a quarter of a million of your fellow Canadian citizens once had liberties that they no longer do. You're investing in a regime that is persecuting and arguably committing genocide. against the Uyghur population. This is documented by umpteen numbers of human rights groups around the world.

You are participating in that. You are participating in a regime that has just thrown two innocent Canadians in jail for a thousand days as part of, you know, as we just discussed, their new hostage diplomacy. So at what point do you say to yourself? Enough is enough is enough. So let's take an example, Roger, that you know very well. which is our strategy, what our strategy was toward Russia during the Cold War, when we had strong overlapping and shared interests in the Arctic. And there were a whole series, because Russia is a major Arctic power, as are we.

Government after government after government, conservative government or liberal government, dealt with Russia and did business and collaborated and promoted shared interests in the Arctic. Russia's record at home was not much better than China's record at home is today either. So, and in this case, look at the differences in orders of magnitude. You are recommending cutting ourselves off from one and a half billion of the nine billion on the earth today, building a fence around them, walling them up and saying, let's not engage until they change their behavior. There is no record of success with that kind of strategy.

Absolutely none. It does not change the regime at home. In fact, it builds support for them because they feel beleaguered. And all that happens is that the countries that do that lose out in a big way. No, but I think you can start to draw lines. You can say we're not going to have large numbers of Chinese students coming into our university school systems to, in part, extract, our intellectual property and data and take it home. We are not going to be funding, you know, the Chinese through our foreign aid and other

commitments because, frankly, you know, they can take care of themselves and it's not really that nice to lock our citizens up for a thousand days on trumped up charges. We can, as you say, kick Huawei out of our next generation build of telecommunications. There are a lot of concrete things, steps that we can take that don't stop selling canola to China if they want to buy it. But at the same time, you know, we do react to this. We don't simply roll over for the Manulife's and, you know, the McKinsey's and the others of this world, who would like to go back to a pre-2 Michaels relationship between China and Canada,

where everything was on the table. There were musings about a free trade agreement, Janice. we were talking about five years ago between China and Canada. I mean, please, spare me the self-interest. Spare me people dressing up profit in some kind of, you know, grand theory of international relations. What this is is it is a clique within our business and other elite leadership in this country that rather likes the idea of enriching themselves, like so many have in the United States and elsewhere by being obsequious to the Chinese who are smart and control access to their market.

They reward those that, as we know, kowtow and genuflect and operate in the way that the Chinese want them to, and they exclude those who don't. So my hat's off to the Chinese for being realistic about it. I just think we should be as realistic and kind. Listen, I completely agree that we need to be realistic. I completely agree that we should not go back to free Michael's, you know, naive views. I think there are really important restraints that we put in place. One of them is on the building of our 5G networks.

We've already now subject all our research proposals with Chinese partners to an additional layer of security review in this country. These are new regulations that went into place just three months ago. We don't do that with any other country in the world, but we do do it for university partnerships with Chinese universities. So we are putting in place some guardrails, but I don't think we go from there to, this is a corporate conspiracy by corporate Canada to enrich themselves for their own advantage at the expense of all. All right, thinking, world, your virtuous cana. I'm just saying it's good old self-interest,

and sometimes self-interest and national interest, you know, don't coincide. Look, we've gone long in this segment, so we're only going to have time for two topics of the show, but I think that was an important one to go to one. You're going to come back to this, Roger, many, many times. Yeah, it has been one of the big stories. It will be. It will be the dominant issue for the next 10 years, right?

You've been listening to a sample of the Monk Members Only podcast, To access the rest of the episode, consider becoming a member. Membership is free and available at www.w monk debates.com. Once you've joined as a member, go to your membership profile to access the rest of this episode and all of our Monk members podcast. Thanks for listening.