February 6, 2023


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Canada can do business with China despite the yelling

You might have noticed that China is tightening the screws on Australia, telling Chinese importers to avoid buying Australian cotton.

You might have heard China’s ambassador to Canada last week seeming to threaten Canadians living in Hong Kong if Canada accepts political refugees from the former British colony.

Did you notice that Canada’s exports to China are getting better? Probably not.

Lots of Canadian commodities are flowing to China, with little fanfare.

That includes agricultural goods, even including some canola, regardless of the ongoing diplomatic dispute over the arrest and extradition proceedings of Huawei executive Meng Wanzhou.

“China is ideological, yes, but they’re also practical,” said Doug Horner, a former agriculture minister of Alberta who now advises Canadian companies trying to do business in China.

“So, when they need canola, it’ll get in there.”

It’s a good thing, almost certainly, that trade and business can go on without really being noticed.

Since the Meng matter began, the question of how to deal with China has been hanging before us. Some think Canada should hand Meng back to China and hope they forgive us, regardless of whether Canada has actually done anything wrong. They want Canada to keep China happy, whatever that takes.

Others think Canada should stick to its legal and moral principles and refuse to bend to the communist government’s bullying behaviour. Some things are more important than commerce, they think, and Canada should never be afraid to act or speak in defence of its values.

Others just hope the whole thing can mellow down and things get back to a little more “normal,” somehow. Canada shouldn’t kowtow to China but should endeavour to allow the situation to cool and avoid provoking the dragon.

People in that last group should feel some confidence as many Canadian exports, including agricultural ones, continue, some even growing, despite the dispute. Perhaps it will be possible to take advantage of the huge Chinese market, if China can just focus its belligerence on somebody else, such as Australia.

That will take some doing, and some self-discipline. Canada, to successfully execute a “mellowing-out” strategy, will need to be non-provocative, which is hard to do when China seems to get offended by all sorts of things.

Accepting Hong Kong democracy activists is one of those things. It’s hard to see how Canada can keep its soul if it refuses to accept Hong Kong refugees just because China’s authoritarian government wants to get its hands on them.

Canada’s foreign ministers will be dealing with this for many years, no doubt.

But the Australian example perhaps offers us some insight. That country has been much more vocal in its criticism of China and that’s having a real impact on farmers there.

In Canada, angry words are still being exchanged with China, both over the current diplomatic dispute over the jailing of “the Michaels” and the extradition of Meng, and over other issues such as the mass detention of the Uyghurs.

On the 50th anniversary of Canada and mainland China forming a diplomatic relationship, Prime Minister Justin Trudeau condemned China’s “coercive diplomacy,” as well as vowing to “continue to work with our fellow like-minded nations around the world to impress upon China that its approach to internal affairs and global affairs is not on a particularly productive path for itself or for all of us.”

Chinese foreign ministry spokesperson Zhou Lijian shot back:

“We firmly deplore and oppose the Canadian side deliberately confusing right and wrong and once again making erroneous comments, and we have lodged stern representations.”

So, things are still testy on a diplomatic level.

But if Canada sticks to working with allies on human rights and geopolitical issues, it might be possible to keep the dispute diplomatic while allowing business to continue.

Australia has been more vocal about Chinese transgressions and depends more heavily upon the Chinese market, so its situation is proving more difficult.

But for Canada, there’s a chance that mellowing out might be possible. There might be some yelling, but there can still be business.