Thank you for the invitation, Mr. Chair.
Good morning, ladies and gentlemen.
I am a career diplomat, having spent 39 years with Global Affairs Canada, including 13 years in China: 2 years in Hong Kong and 11 years in Beijing. I was an ambassador for the last four years of that period, from 2012 to 2016.
Today, I would like to discuss three topics: the state of bilateral relations, China under Xi Jinping and, finally, the adjustments required, in my view, to Canada's engagement strategy with China.
Before we get started, let me give you some of my main messages. This committee provides an opportunity not only to take stock of the bilateral relationship, but also to adjust Canada's engagement strategy towards China.
It has become very difficult to remain ambivalent on China after having been victims of their brutal retaliatory measures following the arrest of Mrs. Meng Wanzhou and also knowing how they interfere in Hong Kong and the treatment given to Uighurs and other Muslim minorities in Xinjiang.
Colin Robertson pointed out the following in the Globe and Mail last July:
We need a realistic, not a romantic, China policy. It should start with the recognition that China is an authoritarian state, a strategic competitor and systemic rival. It will never follow Western democratic norms because that would destabilize the Communist Party—the root and base of the People’s Republic of China.
As a result, we have to review our engagement strategy with China and base our approach on the protection of our values and on reciprocity. It also means diversifying our trade to other countries in Asia. As well, we need to work with partners to reinforce the multilateral system. Domestically, we need to react strongly to any interference attempt by the Chinese Communist Party or the Chinese government. Similar to Australia, we need to adopt laws to prevent such interference. Finally, we need to continue to develop our competencies to better understand China, as it is not going away.
Let me turn to bilateral relations. As you know, all official dialogue is suspended. There are very few and limited official contacts. Fifteen months into the crisis, what has been the impact of the strategy pursued by the Canadian government so far? While Michael Kovrig and Michael Spavor have finally had access to a lawyer, there is some uncertainty as to where the legal process stands for them. Their trial could be announced any day. If so, it will take 18 to 24 months before they are sentenced. Once the process starts, it will become a lot more difficult to get them out. I lived through that with Kevin and Julia Garratt. Plus, we have no word from the Chinese supreme court on the appeal of Robert Schellenberg's death sentence. China has warned us that there will be no improvement in the relationship until Mrs. Meng Wanzhou is freed. Unless the judge decides in June that Meng’s rights were not respected when she was arrested, and she is then released, her extradition process will drag on for years.
On the trade front, our exports last year to China dropped 16%, or $4.5 billion, and will likely drop further this year because of the impact of COVID-19 and the trade deal between China and the U.S.A. Plus, we could be subject to further measures if the government decides that Huawei will not participate in 5G development in Canada. In summary, we have to brace ourselves for years of difficult relations.
Howard spoke about China under Xi Jinping. I will summarize my comments here, because I agree with all he said on Xi Jinping. This crisis shows the challenges of dealing with a superpower that ignores international rules when they are not to its liking and does not hesitate to severely punish countries that refuse to obey its diktats. While Canada is not the first country to be at the receiving end of China’s displeasure, it is the first time where a country has rallied support from allies. In fact, this also illustrates how China has become a lot more assertive, aggressive and, I would say, arrogant since Xi Jinping took control of the Communist Party in November 2012. Of course, the ongoing crisis related to COVID-19 is having a very severe impact on the Chinese economy. It comes after a difficult 2019 for Xi Jinping, with the situation in Hong Kong not resolved, electoral results not to his liking in Taiwan, the trade war with the U.S., which has slowed down the Chinese economy, and the African swine flu epidemic.
It also makes it almost impossible to meet two of his goals—namely, eliminating poverty this year and China becoming a comprehensively well-off society. For that, he needs growth of at least 5.6%, and I think it's likely to be around 4% to 5%. While there is a lot of popular discontent, I don't think the Xi leadership is under threat.
This leads me to my third point and the key question for Canada and other western countries: Is it possible to have normal relations with China? I would argue that despite the ongoing problems that could mar the relationship for years, we have to look at where we want to be 10 years from now. Despite the slowdown of its economy, and especially the ongoing COVID-19 crisis, China can continue to grow at 4% to 6% for many years. I base this on its urbanization rate, which is still low at about 59%, and its plan to move to an economy where growth will be based on consumption and services. Of course, debt has to be watched. It stands now at about 300% of GDP. All of this is to say that China will remain an important market for Canadian exporters.
In my view, there are a number of measures the government could take, both bilaterally and multilaterally. On the bilateral side, as a starting point we should define our fundamental values and interests. Therefore, there should be no tolerance for freelancing by Chinese investigators in Canada to repatriate economic fugitives and no tolerance for interference in Canadian politics, on Canadian campuses, and in the Canadian Chinese community. As I mentioned earlier, I encourage you to look at the four laws adopted by Australia to prevent interference in its internal affairs. There should be no tolerance for spying by the Chinese government or the People's Liberation Army to gain a commercial advantage. In fact, we should expel Chinese spies when they are discovered, or charge perpetrators of espionage.
As well, I think we should announce that we will no longer pursue a free trade agreement with China. We should launch a special review of an ongoing collaboration on artificial intelligence. This would be to try to ensure that Canadian technology is not used to put in place the social credit system in China. Also, we should look at the bilateral investment treaty to see if changes are required. We should conduct more rigorous and sustained inspections of Chinese products to ensure they satisfy our safety standards. We should announce that we will redeploy trade commissioners to other countries in Asia and take advantage of free trade agreements while looking at ways to better support companies in China. In my view, we should apply reciprocity in terms of Chinese government access in Ottawa to make it similar to what Ambassador Barton has in Beijing. What I have in mind is that no federal minister should accept an invitation to lunch or dinner at the Chinese embassy.
As Howard said, we have to continue to work with China on global issues, such as climate change—months ago, in fact, I was thinking about pandemics, and now we are in the middle of one—economic issues and nuclear proliferation. There are many areas in which Canada can offer a lot to China.
Huawei has been discussed a lot. I worked on this issue when I was ambassador. I think we should open the 5G process to all public companies and adopt a position similar to that of the United Kingdom. So far, the approach pursued by CSE, whereby all equipment is tested before being deployed in Canada, has worked. Again, the government, and business for that matter, will have to increase their capacity to understand China better and to ensure a well-informed and more sophisticated approach to China.
On the multilateral front, clearly Canada is not in a position to criticize China much by itself on its trade practices or human rights. We must recognize that our capacity to influence is very limited. As China is concerned about its international reputation, we should continue to seek support from allies, including in Asia from Japan, South Korea, Vietnam and Singapore, to démarche the Chinese government to release our prisoners, but we should also think about developing a strategy to join efforts on issues of common concern in order to prevent China from punishing another country that does something that displeases it. We should also make joint démarches in Beijing on the situation in Xinjiang or human rights abuses and call on China to respect its own constitution and improve the way it administers justice. This is also important to reassure foreign investors.
We should also look at ways to better support democracy in Hong Kong and Taiwan. We should work also with allies on common approaches to Chinese opposition of foreign technology and investment in general, on ensuring that China delivers on the promises it made when it joined the WTO, and on pushing for the respect of international norms, so as to ensure that the multilateral system works and is not undermined, and that obligations apply to all.
In conclusion, as Kurt Campbell and Jake Sullivan pointed out in the September edition of Foreign Affairs:
The best defence of democracy is to stress the values that are essential to good governance, especially transparency and accountability, and to support civil society, independent media, and the free flow of information.
Thank you for your attention. I will be happy to answer your questions.