Canada-China Relations Committee on Feb. 5th, 2020

[The Chair, Liberal, Geoff Regan]

Colleagues, this meeting of the Special Committee on Canada-China Relations will come to order.

Mr. Harris, I understand you have a point of order.

[Jack Harris, NDP, St. John's East, NL]

Yes, Chair. Thank you very much.

At a meeting on January 30, we asked the government to produce a list of the 14 countries it had indicated were in support of our position on, and concern about, Michael Kovrig and Michael Spavor. Fourteen countries have publicly endorsed Canada's position, as well as an unnamed number that have not offered their names publicly. The committee was offered a list of these and I'm wondering if that has been produced yet. I believe it was Mr. Thoppil who offered to do that. Has it been made available to the committee yet?

[The Chair, Liberal, Geoff Regan]

Let me check with the clerk.

We received several documents at 4 p.m. today that will be distributed tomorrow morning. I'm not sure whether that is one of them. The clerk will check on that. Hopefully, we can have an answer to that question before the end of the meeting, or perhaps at the end of the meeting.

Colleagues, before us today we have His Excellency Ambassador Dominic Barton, Ambassador Extraordinary and Plenipotentiary of Canada to the People's Republic of China. With him, from the Department of Foreign Affairs, Trade and Development, is Mr. Shawn Steil, executive director, Greater China.

Ambassador, you'll have 20 minutes for your opening statement, followed of course by questions.

[Dominic Barton, Ambassador Extraordinary and Plenipotentiary of Canada to the People's Republic of China]

Thank you very much.

Thank you, Mr. Chair and members of the committee. I know that you're taking on very important work, and I'm very honoured to be able to come and talk to you today.

I want to spend just two minutes on the coronavirus. I know that the minister has already talked a lot about it. We have 373 Canadians seeking assistance to leave Hubei province. The 211 on the flight manifest should be leaving tomorrow at about noon, with the weather and all that stuff being in our favour. Then we're looking at other options, whether relating to other countries' planes or to having our own plane coming in. We have eight consular people on the ground, because there are a lot of complications in moving people. We've also set up a call centre in the Beijing embassy in case people have a lot of questions about getting water, food and so forth in that environment. I'd be happy to talk to more about that.

The other comment I would make is that the Government of Canada, working through the Canadian Red Cross, has also provided protective medical equipment to China. That was sent yesterday. They're en route and will be heading right to Hubei. I would just echo what's being said at the World Health Organization. I commend what China is doing in trying to contain this and the effort that's under way on that front.

In September of last year, Prime Minister Trudeau appointed me as ambassador. I've basically been in the role for about four and a half months. I was in Beijing at the end of September on the same day that the new Chinese ambassador came here. As I think you well know, my career has been in the private sector all the way through. I'm honoured to be given the opportunity to serve my country, and that's to promote and defend Canada's interests and values. I hope it's to also help China better understand Canada, and Canadians to better understand China. I want to say also that the utmost priority of my goal and objectives is to work for the release of Michael Kovrig and Michael Spavor, and to seek clemency for Robert Schellenberg. That's right in the headlights, and I think about that every day.

In December 2018, Canada's relations with China fundamentally changed, and that was following the arrest of Madam Meng. We can talk about all the consequent acts, but there was a massive change. Things had been actually moving quite well. The chill is real. I'm committed to working hard to resolve the challenges we face in that bilateral relationship, to try to restore our relationship, but critical to that will be the release of the two Michaels and clemency for Robert Schellenberg. The Chinese side is also very angry about where they are, so we have lots to work through. Resuming regular high-level dialogue between our governments and strengthening our channels of communication, which, again, had been broken, are key early aspects of what I've been trying to do in China. Although we've had some success in this regard, many of our regular dialogues, especially the ministerial ones, have not resumed since December 2018.

I want to say a little bit about my background. I lived in China for six years. I was based in Shanghai, working around the country. I've been in Asia for about 12 years. I've had consistent engagement with China. It's actually been mainly with the university sector and some cities. That's been my primary area of interest. I definitely do not pretend to have the answers to all of the issues and on the complex, diverse relationship, but I will try to do my best to give you my lens as to how I see it and what we're up to.

More specifically, there are four things I want to cover quickly: one, a bit of the context on what's happening in China; two, the nature of our relationship today; three, our current presence and what that looks like; and four, probably most importantly, my mandate and the priorities that the Prime Minister and Minister of Foreign Affairs are asking me to pursue.

First, on the context, I know that you don't need lots of stories about how big China is, how important it is, and so forth, because I think you well know that. All I would say is that I think we've seen over the last 15 years, and it's accelerating, an economic power shift towards Asia and a geopolitical shift towards Asia, with China very much at the centre. In terms of global GDP growth, 28% to 30% is coming from China. While that's going to be affected by the coronavirus, it's going to be back.

It's the second-largest consumer market in the world and the largest protein market in the world for meats, but also for vegetable-based protein, so it's a very important market for us. As we look at it, it's the largest energy market in the world, particularly as it relates to renewables. On that side, I could go on.

We are not very relevant in that market. China imports about $2.1 trillion; that was the 2018 number. We have about 1.3% of that. Over the last 25 years, we've lost share in that. We've been growing, which is great, but we've been losing share as we go through it.

I look at China as 22 clusters of cities. It's just too big to look at as one country. Canada is probably relevant in three of those 22 clusters in where we are. There's a lot of potential—a lot of opportunity—for us as we look ahead. I believe this growth will continue with the urbanization and the push to the service sector as we go through it.

Understanding the history and culture I think is critically important. I'm not about to try to talk in detail about that. I just want to register it. In the 3,000-plus years of history, you can learn a lot about how China thinks about priorities, how they make decisions and their values as they go through it.

For example, on the values side, I think it's important to understand—and it's not to say that we agree with it, because we have a different point of view—where they're coming from. They place an importance on the values of collectivism and harmony, owing to a Confucian heritage. Understanding the extent to which China values unity and the needs of society at large, rather than freedom of individual choice...we just have to understand that. That's where they're coming from. It can help us understand the trade-offs they make. It does not mean that we agree with what they do and where they are at; it's about understanding. You can see that in the history.

While I talked about all of the growth and the opportunities and so forth in China, they face very significant challenges. They have a huge issue on poverty going on. There is a very poor part of China. It's a rich and poor country. That's a very big focus of the government—eradicating poverty. They have millions who are still below the international poverty line.

The environment is a big push for them. China has the world's second-highest number of pollution-related deaths, after India. There's been a lot of improvement, but a lot of work needs to be done there.

In terms of demographics, it is a very rapidly aging society, like Canada's, but obviously on a different scale. There are about 260 million people over the age of 60; I don't think it's that old, but it is getting older. That's going to go up to 483 million. That has a huge impact on productivity and on health care costs and lifestyle. Canada has a lot of capability on that side, on the research and in many other dimensions.

Their investment efficiency is dropping. It takes double the amount of investment to get a single unit of output, which has put challenges on their growth model and on their financial system, which is now, by any respect, the second-largest in the world. They now have to worry more about stability, and I think Canada can provide a lot.

They have lots of big issues that they have to work on, besides obviously pandemics and so forth that come up, so it's just to understand the challenges....

On our relationship, the history of our relationship is actually quite unique. They remind me of that almost every time I see someone senior. They're serious about it. They actually go back to missionaries who were in China in the 1870s and 1890s in places such as Chengdu and Chongqing and who established schools and established hospitals. They're revered to this day. Actually, they used to not talk about missionaries. You can now talk about missionaries, and it's due in large part to what Canadian missionaries have done.

There's Norman Bethune. Everyone probably knows about Norman Bethune and the role he played as a doctor in helping Chinese soldiers in World War II. He is completely an icon to the younger generation today.

There is our support for Hong Kong during World War II, when 554 Canadians died trying to defend Hong Kong and 500 Canadians were wounded. That is remembered every year as a joint effort in trying to fight fascism.

There are our wheat sales in 1958 all the way into the 1960s. Against a view in the world where people wanted to isolate Communist China, we provided wheat.

Then there is our diplomatic recognition in 1970, almost a decade before the United States'. They remember that.

All of that said, it's nice to have a history, but there are limits to what that gets us in terms of influence. I'm going to come back to this, because I believe we need to have influence, but having influence means that you have to have some relevance in the system. There is only so far that those historical links can get us there.

Regarding our presence in China, I'm not going to go into the details; these are just facts. We have roughly 650 people in greater China, 150 of those are Canadian-engaged staff and about 500 are locally engaged staff who we shouldn't forget. We obviously have the embassy in Beijing, but also consulates general in Chongqing, Guangzhou, Shanghai and Hong Kong. Then we have a secondary network of trade missions in 10 cities, spread across the country. Then there is the provincial-level involvement that goes on from provinces, which is very important, and some municipal linkages. Those ties are very important, especially when we have challenges such as this. Having wires that are not just at a national level help allow dialogue in what we're doing.

Getting to my mandate and priorities in discussions with the Prime Minister and then with the Minister of Foreign Affairs, the overall objective is to restore the relationship, but with three priorities, and I would argue, one very important caveat that's in that.

First and foremost is to secure the release of Michael Kovrig and Michael Spavor, and get clemency for Robert Schellenberg. That is core; that's a priority.

Second is to promote and protect human rights. That is a sine qua non. It has to be everywhere. It's not something you put to the side while you do it. I want it in the headlights of what you do.

Third is to look at how we can deepen and broaden the relationship. That's the people-to-people ties, not just the government ties. It's the arts, it's the sports, it's the universities. There are lots of other wires and linkages in there. Then it's the economic ties, because there are significant opportunities in many sectors, but particularly in five or six.

Those are the keys to resolving this bilateral tension and restoring trust. I think Canadians want to engage, but on the basis of doing it with international rules and principles that provide predictability and security.

That's what I'm trying to do.

What I will say about the dark periods when it's a very tough discussion is that when I was presenting my letters of credence to President Xi, I told him what my priorities were. He said that in restoring a relationship like this, it takes two sides, that there are things we need to do and there are things they need to do. There is clearly a lot of work there.

On the bilateral tensions and the first priority around the safe and timely return to Canada of Michael Spavor and Michael Kovrig and securing clemency for Robert Schellenberg—as it is in all the death penalty cases in other countries—I am limited by privacy in what I can say. I've seen each of them a number of times as I've gone through it.

The comment I would just want to make—and I'm not used to doing this type of thing—is that I am unbelievably inspired by their resilience. Each of these three people is incredible, as a human and as an individual. I want to say that. That's how I mark my time in China, by my visits that I do to see them. It's not usual for ambassadors. They typically will do one. Every single time I am allowed to visit, I'm going to go.

I, and we, consistently and constructively engage with the Chinese government on their cases and I hope our efforts are soon going to bear fruit. We have to try all different means. We are working closely with other governments, particularly the United States, but also like-minded partners, to try to unlock this, but also to maintain awareness of the issues as this also impacts other countries.

I know this continues to be top of mind for the Prime Minister and is the reason he has repeatedly said that Canada will only respond to this situation in a manner that upholds our values and respect for the rule of law.

My discussions with fellow ambassadors in Beijing have given me insights into what other countries have gone through, because others have gone through this and experienced significant strains in their relationship, and I'm happy to talk more on that.

Again, resolving this issue is critical for us to be able to move to a restored relationship with China.

Promoting and protecting human rights is extremely important and is emphasized to me all the time by the Prime Minister, that it be reinforced no matter what position we are in.

As I mentioned when it comes to values, we have different views on these. That said, we believe that human rights are universal and inalienable, indivisible, interdependent and interrelated. This is why we believe it's important to hold the Chinese government accountable, as we do with all governments, to these principles in its own international and domestic commitments. For example, our government has expressed deep concern over time with China's human rights record, particularly recently in the province of Xinjiang, but also in other parts of the country.

Journalists, diplomats and Chinese civil society representatives I have spoken to agree that 2019 witnessed an increased crackdown on dissent and on expressions of disagreement about China's human rights record, within and outside the country. The Government of Canada is concerned that China's crackdown on dissent is increasingly extending beyond China's own borders. Whether it's in international forums, such as the UN, or domestically Canada continues to emphasize the value of universal human rights as defined by the United Nations.

As I mentioned, our government is concerned by the credible reports of the mass detention, repressive surveillance and family separation affecting Uighurs and other Muslim minorities in Xinjiang, under the pretext of countering extremism, terrorism and separatism. As ambassador, I will continue to raise these issues with Chinese authorities, which I have done, to release Uighurs and other Muslims who have been detained arbitrarily.

Canadians are also becoming more worried about how all of this touches them, as I see in the opinion polls. Charting a way forward in our relations with China has to ensure that we're following the rules and norms of engagement that we all respect.

On deepening and broadening the relationship, we do have frank, difficult discussions with the Chinese government. They do that with us because they're also very concerned with us.

China is more than about government. Many other different relationships are going on in the country, and so it's very important that we deepen and broaden them. They help with resilience and they also help strengthen the relationship.

We've been looking at three areas in particular. One is the fabric, the people-to-people ties, linking everything from art to education, business and communities. One example is that when I've had conversations with party secretaries in cities and they have been very icy at the beginning and then we have one glass of baijiu with them and find out that the party secretary's son or daughter has gone to Western or McGill, and they're very proud of that linkage. There's a linkage in the system with Canada that people know. Our alumni in China who have gone to Canadian universities are, I think, an underutilized asset.

I would love to talk more about promoting trade and investment. I probably should shut up and move on, but I'm very excited by the opportunity we have on many fronts.

I also think we need to build our China competencies more, given the significance of China over the next 100 years. Whether you like China or don't, it is going to play a very important role and we need to build our capabilities, not just on the government side but also in our communities and with our children to understand how this system works.

In conclusion, obviously none of this is easy or straightforward. There's a new adventure almost every week in this.

As a country we need to digest this complexity and the significance of China and how it impacts our interests. In the short term, this means defining our Canadian interests very clearly and identifying where these interests are shared by China so that we can work together on common objectives, and there is a large common objective agenda that we can work on together.

It also means identifying our red lines, where compromise is not possible. Friends disagree with each other; friends get mad at each other, so we need to define where those are and make sure people understand them.

We need to manage both these opportunities and challenges in concert. It's a notion of walking and chewing gum at the same time. We can engage and grow, and we can also be tough at the same time.

Again, to be able to do this, at the beginning we need to resolve the current bilateral challenges in securing the release of Michael Kovrig and Michael Spavor and gaining clemency for Robert Schellenberg. I don't think we're alone in this challenge. Many countries are facing this. I just hope we take a long-term approach in how we do it and don't bounce around over time. We need a long-term approach.

Thank you for listening to me.

[The Chair, Liberal, Geoff Regan]

Thank you very much, Ambassador.

Our first questioner today is Mr. Genuis.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Mr. Chair. Thank you, Mr. Ambassador.

I do want to say at the outset, with greatest respect, that I felt at the time of your appointment and still feel that you are a completely inappropriate choice as ambassador. That's not because of your personal qualifications. It's because, as you said today, we expect our diplomatic corps to defend our interests and our values. I look at the track record with McKinsey and some of the things it was involved in, and those raise big red flags for me in terms of your position now as the representative of Canada defending our interests and our values.

At the time you were in charge of McKinsey, from 2009 to it's my understanding that you advised almost two dozen Chinese state-owned companies. According to The New York Times, one of those companies was the China Communications Construction Company. Could you confirm for me, first of all, that McKinsey did work for the China Communications Construction Company while you were there?

[Dominic Barton]

I'd have to check that out. I'm happy to agree to that if you read it in The New York Times.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Would you prepared to submit to this committee a list of all of the Chinese state-owned companies that you did work for at McKinsey?

[Dominic Barton]

Mr. Chair, what I would need to do is.... McKinsey's pretty careful about client confidentialities. I'd be happy if there were some mechanism so that it isn't in the public domain but that some people could look at it. I'm open to that.

What I would remark, though, is that, first of all, I'm very proud of my career and time in the private sector and with McKinsey and the work that we did. That firm has worked with many companies around the world. We're known for telling truth to power and calling it out as it is.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Okay. You're proud of that, and we know that, and I think it's important that it's on the record.

When you signed the China Communications Construction Company as a client in 2015, they were still under World Bank sanctions because of the corruption and bid-rigging they engaged in in the Philippines. Would you have been aware that they were under sanctions when you signed them on as a client?

[Dominic Barton]

Mr. Chair, what I would say is that McKinsey has over 3,000 clients that we work with. I'm not familiar with that at all. I wasn't involved. I wasn't doing any client work. I was based in London at the time. I'm not looking at that, so I'm just not familiar with the details of that.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Okay.

You were in charge of McKinsey, though, and you were setting, I assume, broad policy direction. For example, McKinsey was advising a company that was carrying out the Chinese government's policy of building militarized islands in the South China Sea. Was it your position that those islands are a violation of international law?

[Dominic Barton]

Mr. Chair, what I would say is that I am not familiar at all with our being involved in designing the islands in the South China Sea. If you want to talk to someone at McKinsey to find out more information, I'm sure we'd be happy to get someone to talk to you about it.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Okay, let me just back up a second, then. In terms of your position now, do you agree with the Permanent Court of Arbitration's ruling that China's program of construction of militarized islands in the South China Sea violates international law? Do you agree with that?

[Dominic Barton]

I would follow the policy of what the government does. I think the Canadian government respects international opinions, but we don't have a view on maritime issues. I'd have to look at what our policy is on that. I don't—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Okay, but you're Canada's ambassador to China, so you're a spokesman for our policy on China. It's your job to communicate that policy to Canadians and to the Chinese government. If you were asked in a meeting with a Chinese official whether our view is consistent with the Hague tribunal's view, would you agree, yes, that the tribunal is right, that these islands violate international law?

[Dominic Barton]

First of all, what I would do on that is that I wouldn't make up an answer. I would actually go and look to see what we do.

I would probably ask to get back to them on it because I am not familiar with all of the pieces. Canada opposes unilateral actions that escalate tensions and undermine stability in the international order, so....

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

It's a simple policy question. It's interesting that you're not briefed on the answer to what is.... I think everybody around this table knows what's happening in the South China Sea, that it's a violation of international law.

You may not remember, but your company was involved in advising the China Communications Construction Company at a time when they were working on this very project in violation of international law.

[Dominic Barton]

Mr. Chair, could I just interject for a second?

I said that there is a very different point you make that the company was involved while this was happening. It doesn't mean that McKinsey was advising on that, so you need to find out more—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

But you were in charge of the company, sir. It's like when the Prime Minister says, “Oh, I didn't do it. It was a functionary in the bureaucracy.” The buck has to stop somewhere and you were running the company, so you were setting the policy direction.

It wasn't just in China. It wasn't just state-owned companies. You know of the case in Saudi Arabia where a report that was prepared identifying critics of the Saudi government led to their being punished in the crackdown. There were so many different cases, when you were in the leadership of McKinsey, of just gross problems in terms of co-operation with gross abusers of human rights. Your response to these questions is to say that you don't know, you don't remember and you weren't responsible, when you were the guy running the show. It doesn't give me a lot of confidence that you, running the show as ambassador—

[The Chair, Liberal, Geoff Regan]

Thank you. I'm sorry, but you've exceeded your time.

Ambassador, I'm afraid you'll have to wait for an opportunity if you wish to respond to that.

We're on to Mr. Fragiskatos.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Mr. Chair, and thank you, Ambassador, for being here.

In 2015 you co-authored a piece for the Center for International Relations and Sustainable Development and there was a quote in it that stood out to me. In fact, it mirrors what we heard in your comments in many ways, but I'll read it to you. It says: “The world is re-balancing towards Asia, and China in particular; Canada must re-balance with it.”

Can you highlight for us the importance of this relationship?

I know you've taken time to do that in your opening statement, but this is a fundamental relationship for Canada—now and in the future. At least that's my view and I think the view of most people in this country.

Could you expand on that?

[Dominic Barton]

Sure.

I think that Canada is a small trading nation. We're a G7 country, but we depend on trade and we depend on trading with large markets, and one of the absolutely largest markets in the world is China and it's going to become the largest market. For Canada's future prosperity, I think it's very important that we be there.

The thing I find most exciting about it is that there is a neat overlap in what we have, and not just in terms of natural resources, which is obviously an important area and where we could do more, but also in terms of our brain power, our regulatory approaches and our financial services, and I could go on. There is a neat overlap.

This will create many jobs. It will allow Canadians with ideas and innovative thoughts to be able to expand them into bigger markets, and it's something the whole country can participate in. Again, China needs a lot of things that we have and I think we could play an even more influential role in how that economy and society evolves.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I acknowledge everything you've said, but I think the word you used in your statement was “chill”. We are in a very difficult moment in the relationship.

Do you have any thoughts on what's worked and what hasn't when other states have had challenges with China? Are there any lessons learned that can be applied, particularly the experience of liberal democracies, that stand out and would be quite appropriate? Is there anything we can learn as a lesson from that and apply it to the current situation?

[Dominic Barton]

Yes, as I mentioned in my opening remarks, I've spent a lot of time with ambassadors from other countries who have gone through this. You think about Norway, Japan, Singapore, and I can go on.

I think there are a couple of lessons learned. I think one is not to be bullied. It is to stand up for what we believe in and what we're going to do.

Number two is to maintain a long-term perspective, to think about the broader relationship, to continue to engage. There are a number of cases where the engagement stopped and it took a long time to get back. The lesson learned from talking with that ambassador and with the government there is that they would have continued to engage.

I think it's being clear about what you want to do. It's continuing to engage and build and look for relationships to engage others to help you in that process.

Those would be a couple of things I would suggest.