The deepening diplomatic dispute between China and Canada that began in December 2018 marks a fundamental change in their longstanding and relatively benign relationship. The conflict is having a damaging effect on both countries. The dispute also compromises China’s claim to be the new champion of the open, rules-based multilateral order, at a time when the United States is retreating from the role.
In December 2018, Canadian police arrested Huawei executive Meng Wanzhou in Vancouver at the request of the United States. The United States is seeking her extradition to answer questions over alleged violations of sanctions against Iran. China, for its part, has called the move politically motivated. They view the arrest as baseless discrimination against China’s businesses and citizens.
During her public extradition hearing in Canada, expected to last another year, she has had access to her legal team, lives in her Vancouver home and travels freely in the city during the day. Her treatment supports Canada’s claim that it is following the rule of law, even if some accuse the Trump administration of taking advantage of Canada. While the US request came through in the midst of the US–China trade war and at the height of security concerns surrounding Beijing’s influence over Huawei, Canada has been steadfast in following proper and transparent legal procedure.
Despite mounting pressure from Canada’s opposition
Conservative party, Prime Minister Justin Trudeau’s Liberal
government has achieved little in resolving the dispute.
With the elephant standing in the room, he also sent the
Minister for Small Business to China to foster trade
China’s arrest of two expatriate Canadians soon after Meng’s arrest has not involved the same transparency or treatment. Besides the legal process and reasons for detention being shrouded in mystery, they have also had difficulty accessing legal advice, contacting family members and the reading glasses of one were seized. China also re-tried and imposed the death penalty on a Canadian it had previously sentenced to 15 years imprisonment for drug smuggling. China then arrested another Canadian on drug charges, along with 15 other foreigners.
At the same time as demanding Meng’s release, China has initiated escalating, discriminatory trade sanctions against Canadian agricultural products. And Chinese fighters recently ‘buzzed’ Canadian warships in international waters in the East China Sea. While China has not overtly linked these actions to the Meng case, the timing and language suggests strong connection.
Despite mounting pressure from Canada’s opposition Conservative party, Prime Minister Justin Trudeau’s Liberal government has achieved little in resolving the dispute. With the elephant standing in the room, he also sent the Minister for Small Business to China to foster trade. Trudeau managed to enlist the support of partner countries over the dispute, securing backing by March from the United States, the European Union and NATO. The G7 foreign ministers meeting in France on 6 April publicly declared, ‘we are deeply concerned by recent arbitrary actions of Chinese authorities, including the arbitrary detention and sentencing of foreign citizens’.
Trudeau then had US President Donald Trump intervene with Chinese President Xi Jinping on Canada’s behalf at the June Osaka G20 summit. Trudeau also persuaded Xi to resume bilateral discussions over the issue. The dispute will likely continue and even deepen if further steps and dialogue on constructing a path forward are not developed.
China risks losing Canada as a serious and prospective free trade partner and Huawei customer. Before December 2018, 55 per cent of Canadians favoured concluding a bilateral free trade deal with China. But in February 2019, a University of British Columbia poll showed that only 22 per cent had a favourable image of China, down 14 points from the previous year. By July, a Research Co. poll showed that more than two-thirds of Canadians rejected closer ties with China. Almost three-quarters supported the Trudeau government’s management of the Meng case and wanted Huawei banned from Canada’s 5G networks. A long road now lies ahead in the recovery of relations and the improvement of perceptions between the two.
The Canadian government has for now delayed its decision on whether to allow Huawei to supply 5G network equipment in Canada until after the general election this October. But Canada will likely join its other security partners who have denied Huawei 5G network access — the United States, Japan, Australia and New Zealand. These countries are pressing for unanimity among intelligence partners in general and from the United Kingdom in particular — the other remaining Five Eyes partner. Should they join common cause, these countries may well exert influence upon the G7 as a whole.
Given their goals, Beijing’s better course of action might be to now defuse tensions rather than stoke them. Exclusion from G7 markets would be a heavy price in economic revenues and China’s desire for global technological leadership. The dispute also comes at a time when China’s soft power is diminishing, given its treatment of the Uighur people and the rising sentiments of independence among the citizens of Hong Kong and Taiwan.
In a 21st century world where global connectivity and integration is key to progress and where transparency and the rule of law is more crucial than ever, China should eventually recognise that Canada is a partner worth having.
John Kirton is Co-Director of the G20 Research Group and Director of the G7 Research Group at the University of Toronto