Thank you very much.
Canada's new Indo-Pacific policy defines China as an “increasingly disruptive global power.” Others of our like-minded democratic allies are using more straightforward language in identifying that their national policies should regard China as a strategic competitor or systemic rival. After reading over a lot of the evidence given to this committee, I judge that what we're really talking about here is China as an emerging strategic adversary.
China's geo-strategic agenda is shaped by the ideology of the Chinese Communist Party as expounded by its general secretary, Xi Jinping, which is transparently hostile to Canada and the west’s liberal values.
China as a nation, Chinese culture and the Chinese people are not what this is about, but right now, we have to recognize that the Communist Party is what it is. China’s 2017 revision of the constitution of their party makes it clear that the party exercises overall leadership over all areas of endeavour in every part of the country.
As Xi Jinping has put it, quoting Chairman Mao, “Party, government, military, civilian, and academic; east, west, south, north and centre, the Party leads everything.” A commentary by the official Xinhua News Agency on the statement by Mr. Xi says that the party exercises all leadership in all areas of endeavour in this country.
The People’s Republic of China's Chinese Communist Party regime is an integrated party-state-military-security-industrial complex, under which, as they put it, the party's leadership is “absolute,” “powerful,” “comprehensive” and “unified.”
All business enterprises in China are subject to direction and coordination by the Chinese Communist Party and are able to be deployed for non-commercial regime-strategic purposes, and we see a lot of this, unfortunately. There are no Chinese industrial or commercial enterprises existing independently from China’s party-state. While some important Chinese businesses, such as Huawei, are not deemed state-owned enterprises as such, they are still integral components of China’s Communist Party regime integrated into the overall purposes of the Chinese Communist Party-state. That's why we're not allowing the Huawei 5G software and hardware into our Canadian telecommunications networks.
Moreover, Chinese enterprises can reciprocally draw on the Chinese military and intelligence services to bring technology and data to their commercial advantage—as there is compelling evidence that Huawei, for example, has done—so China's integrated regime is able to mobilize business relations to further its purposes in a variety of aspects. Let me mention a few.
First of all is technology transfer. There are many examples of the foreign party’s technology or proprietary manufacturing processes being transferred to the Chinese regime.
Then there is espionage. The mobilization of Chinese businesses to facilitate espionage is well established. Leaving aside the provision of China’s intelligence law requiring all Chinese citizens to collaborate with security and intelligence when called upon to do so, the integrated nature of the regime allows for smooth melding of the profit motive and pursuit of geostrategic advantage. The latter always trumps economic benefit.
Then we have economic coercion and retaliation for states that have unfriendly, as China deems it, policies. We see economic coercion by the Chinese regime to pressure foreign governments to comply with Chinese non-economic demands on them. For example, when the South Korean LOTTE conglomerate had the terminal high altitude air defence missile defence system designed to counter North Korean missiles installed on a LOTTE golf course, LOTTE’s operations in China were affected by the simultaneous close-down of the operations of its many department stores in China on false grounds of fire code violations. We all know about the Canadian canola seed producers who had their contracts with China cancelled on false claims that their product was contaminated by non-seed matter.
We also have support of illegal police operations in foreign nations. As our government has observed, Chinese businesses in Canada have sent false letters of invitation to facilitate fraudulent visa applications by Chinese police to enter Canada to engage in illegal activities.
Then we have the enforcement of “discourse power”, whereby several multinational companies have had to “correct”—as one might put it—their websites and issue apologies for non-compliance with Chinese regime discourse that the Taiwanese government is an illegitimate rogue regime that will be returned to the embrace of the motherland as a Chinese province and be ruled from Beijing. For example, the Marriott hotel website was blocked in China until they ceased to identify Taiwan as a separate market for their hotel business.
Let me conclude by saying that investment by Canada in Chinese business carries the risk of Canada becoming complicit in all of these things that I have mentioned, even if rigorous due diligence is done before investment is made.
I thank you, Mr. Chair.