Canada-China Relations Committee on March 9th, 2020

[Guy Saint-Jacques]

I think it was Phil Calvert, a former colleague of mine, who said in his testimony that in the case of Taiwan we should try to further develop our relationship. I agree with that. In fact, there is the rule of law in Taiwan, and we should look at ways to support the very clear result that came out of the elections in January and say that we support democracy and that no pressure should be put on Taiwan.

In the case of Hong Kong, it's a very messy situation. China needs Hong Kong, because 70% of foreign investment going to China goes through Hong Kong. There is no Chinese city that can play the role of Hong Kong, because in Hong Kong there is the rule of law, but not in China. We should express support.

In the best of all worlds, we are at a stage where a mediator should come in to try to suggest ways to appease the sides, but, of course, the Chinese government will never suggest that, and that's why we have to make representations in Beijing with our allies to try to convince China to put some water in its wine.

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

Thank you very much.

I've left you only 30 seconds, Mr. Balloch, but on the point about promoting democracy as best we can in Taiwan and Hong Kong, do you have any thoughts?

[Howard Balloch]

I agree with Guy on the Taiwan question. It's got a lot to say for it.

On Hong Kong, I would say that we also need to be more robust in our discussion with the Hong Kong government. I live there, and the Hong Kong government has often not stood up in the way it should stand up to protect the rights of Hong Kong citizens, including 300,000 Canadians.

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

Thank you.

[The Chair, Liberal, Geoff Regan]

I would like to thank the former ambassadors for their service to Canada and for their statements today. They have been very helpful.

Colleagues, we will now suspend for five minutes as we get ready for the next panel. We'll see you in a few minutes.

[The Chair, Liberal, Geoff Regan]

Colleagues, this meeting is called back to order.

We have, by teleconference, three witnesses.

First of all, we have Bonnie Glaser, senior adviser for Asia and director of the China power project at the Center for Strategic and International Studies. She's joining us from Washington. With her is Mr. David Shambaugh, professor and director of the China policy program at George Washington University.

We also have someone who's normally based in Washington but today is in Oslo, Norway—Yun Sun, director of the China program at the Stimson Center.

Thank you very much for joining us today.

We'll ask each of you to speak for up to 10 minutes, starting with Ms. Glaser.

[Bonnie Glaser, Senior Adviser for Asia and Director, China Power Project, Center for Strategic and International Studies, As an Individual]

Thank you for inviting me to appear as a witness at this hearing on Canada-China relations. As an observer of Chinese foreign and security policy for more than 40 years, I'm pleased to provide my assessment of China's evolving global role.

China's involvement in the world is a very complicated picture. Several of your prior witnesses have related examples of China's positive impact, including the creation of the Asian Infrastructure Investment Bank and its contributions to UN peacekeeping operations. However, it is also important to examine examples of its negative impact and fully appreciate China's intentions to modify the international system in ways that are detrimental to democracies.

When Chinese officials claim they seek to uphold the international system, it's important to understand that they have a different definition of the international system from western liberal democracies. Beijing supports global institutions but rejects liberal norms and values. It opposes the network of U.S. alliances established after World War II that underpins the international system.

Xi Jinping has called for China not only to participate in but also to lead global governance reform. In various forums, including key UN agencies, China is seeking to reframe prevailing norms and to introduce its own concepts. Beijing has long expressed dissatisfaction with the democratic governance system, but it has only been in recent years that it has begun to push for its own alternative vision. China's more assertive stance is a result of both its assessment that the international balance of power is shifting in China's favour, with the onset of the 2008 global financial crisis, and also the opportunities, frankly, presented by the Trump administration's withdrawal from several key multilateral organizations.

In the UN, China is introducing its own rules and norms. In the Human Rights Council, Beijing is promoting orthodox interpretations of national sovereignty and non-interference in internal affairs that weaken widely accepted international norms of human rights, transparency and accountability. In areas where international law is still evolving, China has been especially active. Alongside Russia, China has pushed its version of Internet governance that emphasizes state sovereignty and territoriality in the digital space. Other examples include outer space, the deep sea and the polar regions. In the Arctic, China has labelled itself a near-Arctic state, with the goal of inserting itself into international debates over Arctic governance.

Xi Jinping has taken measures to operationalize China's long-standing positions that U.S. alliances are Cold War relics that should be eliminated. In 2014, Xi put forward his vision for an Asia free of alliances and the military presence of the United States. In the South China Sea, through which an estimated $3.4 trillion in trade passes annually, China is aggressively pushing to oust foreign players. In its negotiations with the members of ASEAN on a code of conduct, Beijing proposed that the parties prohibit holding military exercises with countries outside Southeast Asia and bar co-operation with energy companies from outside the region.

Abroad, China is actively promoting its development model. At the 19th party congress in October 2017, Xi Jinping explicitly touted China's experience, stating that China's miracle of rapid economic growth and long-term social stability “offers a new option for other countries and nations who want to speed up their development while preserving their independence”. This unprecedented push is in part to secure the position of the Chinese Communist Party at home, but it's also intended to bolster the legitimacy of authoritarian political systems worldwide and weaken the appeal of democracy.

When it comes to international rules, China's compliance is selective, and its observance of law is weakest in the maritime realm, in China's near seas, where it prioritizes safeguarding China's sovereignty, security and development interests. Beijing rejected the July 2016 findings of an UNCLOS arbitral tribunal, which ruled that China's nine-dash line is invalid as a claim to resource rights.

China's intimidation of Taiwan, a democracy where over 23 million people reside, has reached new heights in recent years. China's military exercises have become increasingly provocative and dangerous, with large numbers of fighters, bombers and reconnaissance aircraft crossing the centre line of the Taiwan Strait. Beijing has poached seven of Taipei's diplomatic partners since 2016, leaving the island with only 15 countries that recognize it. Countries as well as companies that are seen as challenging Chinese sovereignty over Taiwan are issued stern warnings and threatened with punishment.

Canada is among the countries, of course, that have been targeted for harming Chinese interests and offending Chinese sensibilities. The arrest of Canadian citizens and the ban on imports of Canadian canola oil and other agricultural products are just the latest examples of Chinese economic coercion aimed at punishing countries that harm Chinese interests.

The list of target countries is long: Norway, for granting the Nobel Peace Prize to Chinese dissident Liu Xiaobo; Japan, for arresting a Chinese ship captain after he rammed a Japanese Coast Guard vessel in disputed waters; the Philippines, for confronting Chinese fishermen operating in Scarborough Shoal; and on and on, as well as South Korea for THAAD, etc.

China does not respect rule of law. lt does not share liberal democratic values, and it does not protect human rights. It is seeking to alter the international system in ways that would be favourable to China and detrimental to western interests. China's tool of domestic governance, its detention of over one million Uighurs, its censorship of expression, and its social credit system should not be a model for the rest of the world.

Although l'm not a Canadian citizen, l'd like to offer a few suggestions for Canada to consider in its policy going forward.

First, establish priorities in your relations with China. Identify what Canada must insist on and what it will not tolerate. Be firm and consistent. A precondition for the resumption of normal bilateral ties should be the release of Michael Kovrig and Michael Spavor. Beijing ultimately respects countries that stand up for their interests. Canada's priorities and principles in its relations with China could be set out in a strategy paper similar to that issued by Sweden or embedded in a broader foreign policy white paper as Australia has done.

Second, where possible, pursue a collective response. Seek to work with like-minded countries to protect shared interests. Japan, along with the U.S. and the European Union, filed a WTO case against Chinese actions to drastically reduce rare earth exports in 2010, and the challengers won in 2014. I think Canada, the U.S. and other like-minded countries should establish a multilateral reserve fund to compensate any of the fund's members for costs imposed by Chinese economic coercion. The fund should be capitalized by its members as well as by private sector firms that might be affected by coercion.

Third and finally, identify sources of leverage and use them. Although Canada is a middle power, not a superpower, it still has ways in which it can get China's attention. Pulling out of China's AIIB, which I know some politicians have advocated for, would not significantly affect the bank's lending capacity, of course, but it would deal a blow to China's reputation. Canada should also consider invoking the Magnitsky Law against China, which allows the government to block visas for officials and freeze or seize their assets in Canada.

Calling out China for its human rights abuses in Xinjiang would be consistent with Canada's long-standing support for human rights and freedom, and doing so might encourage countries to take similar measures.

Thank you again for inviting me to testify before the special committee.

[The Chair, Liberal, Geoff Regan]

Thank you very much.

Mr. Shambaugh.

[David Shambaugh, Professor and Director, China Policy Program, The George Washington University, As an Individual]

Thank you, sir.

It is indeed a distinct honour and privilege for me to be invited to appear before this distinguished parliamentary special committee.

I apologize for not having submitted this opening statement in time for it to be translated into French, but I only received the invitation to testify a few days ago. I was able to prepare the statement only over the weekend, but I have submitted it and hopefully your interpreters have it in front of them and it will help them.

I have been a student and scholar of China for 45 years. I read and speak Chinese fairly fluently. I've visited China, Hong Kong and Taiwan hundreds of times over 41 consecutive years, and I have lived in China for a total of five years. Until five years ago, I had extremely good access to institutions and individuals throughout the party, government, military, academia and society in China.

While a continually fascinating and complex land, the country's current trajectory is quite troubling to me in many dimensions. I commend this special committee on your inquiry, as it's a critical element in Canada's re-evaluation of its relations with the People's Republic of China, particularly in the wake of, but not exclusively related to, the deterioration of bilateral relations in the wake of the cases of Meng Wanzhou, Michael Kovrig, Michael Spavor and Robert Schellenberg.

The reason I say “not exclusively related to” is that it seems apparent—to me, at least, south of our common border—that over the last two to three years the Canadian government and civil society have been engaged in a collective national gestalt over your relations with China.

The aforementioned cases may have crystallized and brought to the surface a simmering subterranean debate, but there are other unsettling dimensions of relations with China that you have encountered in recent years related to espionage, Chinese investment into key sectors of the Canadian economy, technology theft, intellectual property rights theft—things that other countries are also experiencing—Chinese United Front activities among the Chinese-Canadian diaspora, influence operations towards Chinese elites, the human rights situation in China and other difficulties. I would submit that these issues collectively have led to your national discussion and this special committee's inquiry.

This is, I would submit, a very healthy and very normal gestalt, if you will, for any democracy. From what I have been able to observe from south of our border, this national discussion has proceeded in a very rational, responsible yet probing manner. It's not over yet, and this committee's inquiry will play an important role in its outcome.

Over the past few days, I have read the transcripts of all the previous testimony before the committee, and this morning I was able to see some but not all of the ambassadors' testimony on my way here. Let me particularly associate myself with the opening statements of Phil Calvert, Paul Evans and Charles Burton. Although I do not agree with all their responses in the Q and A period, I did find their opening statements to be very much in line with what I believe.

I also periodically follow the Canadian press and have had recent discussions over the last year with Canadian academic colleagues, as well as diplomats and officials in other departments in Ottawa.

From all of this, I discern that there is a fairly fundamental rethink going on in Canada concerning the fundamental assumptions and principles of its relationship with China. Again, this is all very normal, very therapeutic and probably overdue, and it will produce hopefully a recalibrated approach towards China that best serves Canadian national interests.

Canada is hardly alone in having such a national rethink about China. South of the border, we Americans have been experiencing a very similar national debate concerning our relations with China in recent years. My colleagues and I would be happy to discuss this with you today if you're interested, but I would just say a couple of things about it.

First, it's been brewing for a number of years. It predated but has coalesced under the Trump administration. It has resulted in a substantial critique and re-evaluation of the so-called engagement paradigm that has undergirded U.S. relations with China for four decades. It has resulted in a very bipartisan, fundamental hardening and toughening of U.S. policies towards China across the board. While there is no total agreement on this in the United States, I would say that there is a substantial majority agreement about it. Again, we would be happy to elaborate on that if you're interested.

Moreover, the U.S. and Canada are not alone in undertaking such a fundamental re-evaluation of relations with China. So is the European Union. Europe-China relations are something I've followed for decades rather closely, and I have just returned from Berlin, where we convened a transatlantic symposium on U.S. and European relations with China. My colleague Bonnie Glaser here also recently co-organized a similar German-American dialogue on China, so we're familiar with the European situation. Yun Sun is, of course, today in Norway.

In Europe, there has also been a continent-wide rethinking about and hardening of policies towards China. While continuing to call for collaboration and co-operation in several fields, for the first time in any official statements of the European Commission, its most recent so-called communication, which is like a white paper, described China as a “strategic competitor” and a “systemic rival”.

A similar rethinking is also ongoing in Australia, New Zealand, Japan, South Korea and in several Southeast Asian countries. Other witnesses, including those this morning, have raised the Australian legislation that came out of its national debate. I would agree with them that this is a good model for Canada and other democracies to follow.

Canada is hardly alone in rethinking its relations with China, and there are good empirical reasons why these countries are all re-evaluating their relations with China, namely that the entire world is facing a much more domestically repressive and much more externally confrontational Chinese regime under Xi Jinping.

China has changed; thus the previous premises of our engagement policies need to be rethought and replaced with much more hard-headed responses to China's more offensive behaviour. We cannot cling to outdated Kantian liberal preferences and policies of co-operation with a regime that is among the world's most repressive on earth; is largely mercantilist in its trade and investment policies; is building a world-class offensive military; is increasingly expansionist in its foreign policies, including its belt and road; and increasingly bullies other countries.

Just very briefly, related to this, I was quite interested in this morning's testimony. One of your committee members raised a really interesting question. What do Canadians need to know about China that they don't? We can talk about that today, but I would submit that Canadian academics, at least, need to stop focusing on China as a cultural and civilizational entity and start studying it in depth as a Chinese communist Leninist state, an essentially mixed economy but with Soviet characteristics.

Academics need to start thinking more like intelligence analysts, in my view. The U.K. experience is helpful here. I used to live and teach in the United Kingdom. They had a very similar situation about 20 years ago. They undertook a parliamentary inquiry into the state of Chinese studies in the U.K., which produced a series of government-funded posts going to certain priority areas. We can pursue that, and I would just recommend that for consideration in Canada as well.

Let me just conclude my brief time with this last point. Again, Canada is not alone in being on the receiving end of Chinese punitive actions for behaviour that Beijing considers unfriendly or that violates its so-called core interests. By my count, including Canada, there are 17 countries that have been punished with punitive retaliatory actions by China. Bonnie has just named several of those, so I will leave it at that. We can go into the 17 cases if you're interested, but you're not alone. There is a pattern here. It doesn't take a social scientist to see the pattern.

The precipitating events vary by country, but China's behaviour and China's retaliatory actions also vary by case. I'd note, simply to make you aware, that Canada is hardly in a unique position at present, however regrettable. We Americans stand 100% with Canada under these trying circumstances.

Sweden is also currently experiencing similar circumstances over the Gui Minhai case and other bilateral difficulties, but what Canada and Sweden are experiencing now has become a demonstrable international pattern in Beijing's punitive and aggressive actions towards others.

The entire world is now dealing with a Chinese Communist Party and state that feels emboldened, entitled and empowered. The consequent questions for all of us—certainly for democracies but I would submit for all countries in the world—are the following: What type of push-back is warranted? Second, can we live with a friction-ridden relationship with China? Third, can we escape the trap of the engagement paradigm that leaves us to seek or return to a so-called normal relationship of co-operation with China? Fourth, will the world bend to China's pressure tactics and extraordinary commercial leverage? Lastly, if the world does bend to such tactics, what does it mean for international order?

Canada and Sweden are currently on the front lines of these questions, but the entire world, regardless of political systems, has a major interest in developing convincing answers and effective responses to these difficult questions. I think Bonnie just gave you a series of good recommendations that I would share as well.

Thank you very much for your attention. I look forward to your questions.

[The Chair, Liberal, Geoff Regan]

Thank you, Mr. Shambaugh.

Now we will go to Oslo.

Ms. Sun, you are spending your evening with us, so thank you very much for that.

[Yun Sun, Director, China Program, The Stimson Center, As an Individual]

Thank you, Chair.

Good morning. It is a great honour for me to be invited to provide perspectives and analysis to the Special Committee on Canada-China Relations.

I was asked to provide views on China's global role and approach to the international system, as well as to make recommendations on Canada-China relations.

Historically and traditionally, the international system that China has known and been accustomed to is one of hegemonic stability, centred on and dominated by the Middle Kingdom, a superior and self-perceived benevolent country or civilization. The hegemon-China's superiority in military and economic power formed the foundation for peace and stability through deterrence, coercion and war, and the benevolence, as demonstrated by the hegemon's provision of public goods to help advance the culture through infrastructure, in China's view, anchored the desirability of such a system to other states.

In China's view, Chinese superiority is the foundation for the stability and harmony of the system. In the Chinese conception of the world order, harmony does not [Technical difficulty—Editor] from equality among all countries. Instead, harmony originates from a well-defined and well-enforced hierarchy, in which roles and responsibilities were assigned according to each country's [Technical difficulty—Editor] power. The vision stipulates that states recognize and pledge their deference to the strong and benevolent hegemon, and that's when peace and stability will ensue.

This system existed for 2,000 years in China, until it encountered its most critical existential threat, when the western system of nation states—

[The Chair, Liberal, Geoff Regan]

I'm sorry to interrupt, Ms. Sun. We're having a little problem with the sound. Could I ask you to hold on for one moment while we see if we can fix that?

We're going to suspend for a couple of moments.

Thank you.

[The Chair, Liberal, Geoff Regan]

Ms. Sun, would you please proceed?

Thank you.

[Yun Sun]

Thank you.

This system encountered its most critical existential threat when the western system of nation states prevailed in Asia. While the China-centric system preached the homogeneity of the Chinese civilization among all states on its periphery, the western notion of nation states emphasizes their heterogeneity, and hence, differing and competitive national interests.

What we have witnessed with China’s foreign policy in recent years is an assiduous attempt to break away from western discourse and re-establish the traditional Chinese model of hegemonic stability. In China’s view, China’s primacy in the region stands a reasonable chance to prevail. China, through its power, will create an alternative order based on a different set of values.

This is essentially the goal that the current Chinese leaders are pursuing. China’s rising vitality and intensification of its foreign policy behaviours is the manifestation of its bid for regional hegemony and global power. That regional hegemony may not deny U.S. access to the East Asian and West Pacific regions, but it does dictate that the U.S. must follow the rules developed and enforced by the regional power. This is the fundamental cause of the escalating strategic rivalry and great power competition we are witnessing between the U.S. and China.

The U.S. has traditionally played the role of an offshore balancer to ensure the plurality of the region by channelling power into the region. However, as China strategically applies its “carrot and stick” foreign policy to displace the United States, first in the Asian region and then more broadly across the globe, this great power competition most likely will continue to intensify.

Here I wish to say a few words in particular about China’s mentality about the west, which is highly relevant for the discussion we are having here today. When China’s regional superiority crumbled in the 19th century, what ensued was a sense of pathos, of self-pity and a sense of victimhood targeted toward the west. With China’s rise and resumption of great power status, it rapidly evolved into China’s own destiny manifesto, a firm belief in China’s preordained and predestined superiority to lead the world and a mentality as well as an urge for revenge when the west seems to reject or disrespect China’s rightful status. In other words, China today still maintains a high level of victim mentality abnormal for a great power, which translates into a heightened sense of vulnerability, hostility and retaliatory actions when it is triggered. Due to this mentality and China’s newly acquired capacity and instruments to inflict damage on other countries, the policy toward China by any country has become increasingly challenging.

As shown by the recent Meng Wanzhou case and China’s retaliation, Canada is caught between two great powers in their tug of war. In China, there is no doubt that the reparation of the ties or the so-called renormalization of bilateral relations will have to be predicated upon Meng’s release, or at the minimum, upon her not being extradited to the United States, combined with significant policy moves from the Canadian government to show goodwill toward China. Anything less than significant will be appreciated by China but unlikely to generate the policy change people would like to see. The recent Chinese reaction to Canada’s position on the coronavirus outbreak in China is one such good example.

The question of how to effectively deal with China while protecting Canada’s national interests is apparently a hard one. While the desire is to maintain neutrality and avoid the difficult binary situation of picking a side, Canada may not eventually have the option or the luxury to do so. Canada and the United States are close allies and we share important common interests, from democratic values to international norms and rules, from national security to bilateral trade and economic prosperity. Recent developments have deepened the disagreements between Canada and China, both on domestic political issues and its foreign policy behaviours. These are basic facts.

To deal with China effectively at this difficult time requires Canada to develop more leverages and influence vis-à-vis China and open up more space, new space, between the U.S. and China in the era of great power competition. Alliance management should not just be the leader of the alliance managing the partners. In these fluid times, it is also critical for the partners to manage the alliance relationship in order to mitigate or minimize the potential chance of victimization or collateral damage on specific issues.

Canada could develop a more astute and sophisticated understanding of China and calibrate the outcomes of each interaction between China and Canada before they happen, but beyond that, how to shape the policies and behaviours of great powers, as well as to prepare for and manage the consequences of decisions, will be of utmost importance. In addition, there are increasing demands among middle powers in Europe and in Asia to develop co-operation among themselves in order to restrain and balance the hostile behaviours of great powers. This is a potential direction that Canada could consider more as a policy orientation as well.

Thank you again, Chair. I look forward to the discussion.

[The Chair, Liberal, Geoff Regan]

Thank you very much, Ms. Sun, and thank you for your patience with the sound problems we had briefly.

Now we'll go to the first round of questions or comments for six minutes each.

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

I'd like to thank all of our witnesses for their telepresence here today. I appreciate their expertise.

I'll start off with you, Mr. Shambaugh. You mentioned that in the United States there is a bilateral hardening of feelings towards the rise of China. Could you elaborate a little further on some of the outcomes or areas that this is being channelled into?

[David Shambaugh]

Sure. First of all, this is reflected at both societal and governmental levels. The hardening I was referring to referred to the governmental level, but in fact if you look at public opinion polls and surveys of the American public over the last two to three years, you also see an increased percentage—now up into the mid-60s, I believe—of Americans who see China in a so-called unfavourable light.

The suspicions about China are reflected at both governmental and societal levels, I would say, although when I travel across the United States, I, at least, notice a substantial variation in those levels of suspicion. The further west you go, interestingly, the less suspicious Americans are. Those on the west coast—Washington State, Oregon, California—can't get enough of engagement with China, particularly economic and cultural. I don't want to spend much time on this. If you go into the Rocky Mountains, the central south or the upper Midwest and then certainly into parts of the east, you find varying perceptions of China, but overall now, a majority of about two-thirds of Americans see China unfavourably.

The hardening I was referring to, though, is manifest across a number of policy areas. It started under the Obama administration but has really increased during the Trump administration. Export controls have been substantially ramped up. American companies are now forbidden to sell certain items such as chips and other items that go into various electronics, which you know about very well.

We don't really have that much of a controversy in our country about Huawei, strangely enough. We just ban them. We don't allow them to bid on our networks. That's my understanding. Unlike your country and Europe, which are undergoing a big debate on that, we're not really having a debate about it.

There are new executive branch policies about Chinese investment into critical infrastructure. The review procedures of CFIUS, the Committee on Foreign Investment in the United States, have also been strengthened. There are an increasing number of Chinese cases in front of CFIUS, and increasing FBI surveillance, if that's the right word, or FBI monitoring, of Chinese espionage on American campuses, in American laboratories and throughout the private sector. China is by far, if you read the statements of FBI director Wray, the most egregious infringer of American technology theft.

In the defence realm, Bonnie can speak to this more. That's more long-standing and predates the Trump administration. You saw what happened last week. It was referenced in this morning's session about the new caps put on Chinese journalists here in the U.S. for four state agencies. There are others, such as screening of visas, for example, of Chinese scholars coming to the United States. The Trump administration has really ramped these up. I wouldn't necessarily call these “retaliatory”, but rather sober-minded policies to more carefully monitor the extent of the interactions between Chinese and Americans inside the United States. That's to say nothing about the long-standing concerns about American business, American academia and American government, including public diplomacy.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Sir, I do have limited time, and I do appreciate that. It sounds to me, though, that for the Americans institutionally, whether it's through legal channels or reciprocity-type actions, there seems to be a more bipartisan approach when it comes to these things. I appreciate that.

Ms. Sun, in your comments, at least what I took from it, you talked about the need for a country like Canada to not only become more aware of some of the historical and cultural grievances that China views for itself and how it views the world in some of its foreign policy decisions, but that for a small and open trading country like Canada we need to be far more proactive than reactive. Is that right?

[Yun Sun]

Yes. Thank you, sir, for your question.

To answer that question, I think that first I will agree with Professor Shambaugh's assessment that China should not be treated as a “civilization”, as just a cultural concept. It is a real country, with real political thinking in its foreign policy behaviour and with assertive instruments to pursue those foreign policy goals.

I think it is highly important for a country such as Canada to develop an accurate and sophisticated understanding of what China is and what China's action plans really indicate. For example, in the case of the Huawei 5G technology, I think the anticipation of the variations in China's policy reactions would be highly necessary in this decision-making.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Just to sum up, there has been some question about whether or not we should be taking the side of the United States or the side of China. I'm not going to get into that, other than to say that, nine times out of 10, I'm always going to be on the side of a democratic country.

[The Chair, Liberal, Geoff Regan]

Thank you.

Ms. Yip, you have six minutes.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Last December, the U.S. and China reached a phase one trade deal whereby China would have to make significant additional purchases of U.S. goods and services. How will a phase one trade deal between the U.S. and China affect the competitiveness of Canadian firms that export to or operate in China?

That is open to everyone.

[Bonnie Glaser]

I'll start.

None of us are trade experts. I know that you've already had a witness from Canada West, I think it was, at the end of last month, who talked about some of the implications of what is a managed trade deal. If China has to buy all of its soybeans, or most of them, from the United States, that will have a negative impact on other countries that produce them. Brazil is certainly at the top of that list, but also Canada.

Of course, the targets that were set are really quite high. I think that many people in the United States have been skeptical that China will actually be able to meet those targets. Also, with the COVID-19 epidemic now, it seems even more unlikely that it will reach those targets. It remains to be seen whether China buys a great deal of agricultural products from countries other than the United States as it struggles to meet even the commitments that it has made so far.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Do you feel that this trade deal will impact Canada's relations with the U.S.?

[David Shambaugh]

Not necessarily the phase one trade deal, not in the way that Bonnie just mentioned in the agricultural domain, but I think that some of the successes that came out of phase one with respect to intellectual property rights protection and no forced technology transfer will benefit Canada. That benefits all OECD countries.

There are some positives in the phase one deal of which Canada is a beneficiary, but the real essence of the trade negotiation between the United States and China was not really addressed in the phase one deal. It's all about systemic structural reforms in the Chinese economy. Those were all kicked down the road for a phase two negotiation, which at least here in Washington there's not much expectation for, at least during this administration.

I would say that in getting towards phase two, whether in this or the next administration, it has to be pursued multilaterally with Canada, other OECD countries and G7 members together, because we all share the same interest in opening the Chinese economy, a level playing field and getting China to play by international and particularly WTO rules.