Evidence of meeting #3 for Canada-China Relations in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was taiwan.
A video is available from Parliament.
8:35 p.m.
Liberal
8:35 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
This is a nice surprise.
I want to thank the witnesses for coming at this very late hour to be part of this committee meeting. My first question is to Mr. Houlden and Ms. Ong.
In your opening statement, Mr. Houlden, you mentioned that “stringent COVID restrictions” have “prevented a resurgence of business visitors”. Can you comment further on that? What is the economic impact?
9:20 p.m.
Director Emeritus, China Institute, University of Alberta, As an Individual
That's a very important question.
My assumption would be that the effect of restrictions on Chinese exports to Canada would be more disruptive, at least in the short term. Tariffs would be bearable, and obviously prices would increase, but if we're saying an absolute stoppage of flow, that would be very difficult. Definitely, I believe, the economic impact would take some time to get around.
Even with the difficulties in the U.S.-China relationship under the current president and the previous president, very few American companies actually moved their production out of China. Some did, but they haven't moved it back and reshored it in the United States. Some has gone to Mexico. Some has gone to Vietnam. But are there enough skilled workers available? Are the skills there or the infrastructure? Even in the case of India, it's a real challenge. You can't expect that to happen overnight.
On the export side, I note that on the canola side what happened, to my surprise, was—whoops—we sold our canola somewhere else, and other countries supplied canola to Canada. In some cases, actually, Canadian canola went somewhere else and then was transferred back to China after a perfunctory stop in another port. Both could be problematic.
The greatest would be, in my view, the stoppage of the normal flow of imports. Over time, that could be overcome, but that would take time and I think the economic impact would be quite severe. How severe, I don't know, but I would argue that the need is there for government to at least do a careful study on where the impact would be the greatest, how strategic it would be, which sectors we could cushion and what we could do to lessen that impact, given that it's an unlikely but not impossible series of events.
9:20 p.m.
Conservative
Michael Chong Conservative Wellington—Halton Hills, ON
If that's the case, Dr. Houlden, then wouldn't the biggest impact be on the grand consumer belt of the Quebec City-Windsor corridor, where some two-thirds of Canadian consumers live who use those imports? There's some $70 billion in imports that we bring in from China every year, rather than the exports of some $30 billion, predominantly from the prairie provinces. Wouldn't it seem to make sense that the bigger economic impact would perhaps be felt in central Canada as opposed to western Canada?
9:20 p.m.
Director Emeritus, China Institute, University of Alberta, As an Individual
In that sense you're correct, in the sense that exports of pulp and paper, let's say, go to India, let's say. India might divert some of their trade to Canada that they would have taken elsewhere, but you're right. If you have an automobile being assembled in Ontario, let's say, in Oshawa, and there are pieces of that—auto parts—that are coming from China, that can't be changed quickly. Over time, it can, but there would be at least a short-term to medium-term disruption.
The net effect overall I think would make the energy problems for Europe look small. It would basically take China out of the equation in both ways, imports and exports.
9:20 p.m.
Conservative
Michael Chong Conservative Wellington—Halton Hills, ON
I have a very quick question.
As you know, China banned imports of Canadian canola and pork—and I believe beef—several years ago on spurious grounds.
When China lifted those bans, should the Canadian government have indicated that they weren't prepared to grant whatever permits were necessary for those exports as a signal to China not to try to pull that stunt again?
9:20 p.m.
Director Emeritus, China Institute, University of Alberta, As an Individual
You can do that. My worry sometimes is that you get into a tit-for-tat on trade issues. The Chinese can out “tat” you in some sense. They have many levers, and their government can pull those levers so easily.
9:25 p.m.
Liberal
Rob Oliphant Liberal Don Valley West, ON
Thank you, Mr. Chair.
To all three of you, thank you for sharing your time, your wisdom and your experience.
Professor Ong, I want to start with you.
I loved your opening statement, which I found very insightful, and also your comment about the only certainty being uncertainty.
In the very near future, looking at October 16 and the gathering that will happen in the Great Hall of the People, the National Congress of the Communist Party of China, what should we be looking for? You talked about the consolidation of power, which we have seen in the last two congresses, and it's getting to be complete. We can feel that the challenges to President Xi's power are limited and have been limited.
Other than the drama—and there's always some big pageantry and drama—and the consolidation of power, what should we be looking for? What insights might we gather from there? Are there any signs that you think we should be watching for or listening for?
9:25 p.m.
Professor, Munk School of Global Affairs and Public Policy, University of Toronto
I would be looking for the composition of people in the Politburo standing committee. Right now, it's a seven-member committee, which largely consists of people who are followers of President Xi, but there are also two people who are not. I think most people predicted that you were going to have two semi-independent people so that President Xi wouldn't have a clean sweep.
In a sense, that is only symbolic, because we know that power has also been centralized, in effective terms, but I think the coming months, the months after the party congress, are actually more important. After the pageantry, after the big show, what are the policies that are going to be formulated on Xinjiang, on trade and from politics to economy to society?
I think that once the president becomes more confident of his power, of his grip on elite politics, he will be more confident in putting out the rest of the policies that he actually wants to implement. The next three months after the party congress I think are a very critical period.
