IPS is an ambitious strategy with a broad spectrum of objectives, from trade and investment to sustainable development to people-to-people connections to peace and security. Much work and many resources have been put forth to implement this strategy and promote it in the region.
Canada, as we all know, is heavily dependent on global trade, much more so than our leading trading partners such as the U.S. and China. As Canada needs to diversify our market and supply chains and the world's economy and security agendas increasingly pivot to the Indo-Pacific region, the launch of the IPS study, I think, is very timely.
The framing of China's role as an increasingly disruptive global power has caught a lot of attention. The term Canada uses has gone further with a more negative connotation than other countries', including our closest ally, the U.S., which called China a “strategic competitor”.
Canada's framing prompted a very strong reaction from China, perhaps not surprisingly. A disrupter, however, can also refer to a global power that challenges the norm, spurs tectonic changes and also shakes things up. It is my understanding that the second layer of this meaning was considered in the policy thinking but is rarely mentioned.
As Canada endeavours to expand engagement with the Indo-Pacific, we must recognize that many regional players' views and policies towards China don't necessarily align with ours. ASEAN, which was elevated to Canada's strategic partner status last year, for example, collectively endorsed an inclusive and engagement approach. They favour multilateralism and dialogue rather than isolation and containment. They prefer working with both China and the U.S. rather than being pulled firmly into the orbit of one single great power. Perhaps our regional path forward can be informed in part by the vast experience of the countries in the region.
Aside from geopolitical considerations, the reality is that the Indo-Pacific economy and supply chains are highly integrated both laterally and vertically, with China at the very centre. The size of the Chinese economy roughly equals the rest of the Indo-Pacific combined. Despite the attempt to decouple and de-risk from China and the rise of localization and protectionism in the region, China remains the top trade destination for most countries in the region. Since 2020, ASEAN has become China's number one trading partner. Major ASEAN economies saw double-digit trade expansion with China. Intermediate goods, raw materials, investment and technologies from China play a vital role in the leading industries of these emerging economies.
China's economic reach in the region is both broad and deep into all segments of the supply chains. Diversifying from China in the region won't be easy or even possible. By boosting our presence in this region and engaging with nations other than China, Canada and Canadian entities will inadvertently increase their exposure to China directly or indirectly. Enhanced competencies and knowledge of the region and China are needed to manage this complexity.
Canada's strategy towards Asia, the Indo-Pacific, shall be put into the broader context of a broader global vision. Emergence of regional hot spots and global shocks are nearly inevitable in our volatile world. When there are other competing priorities, countries in the region would ask and wonder if Canada is here to stay and if Canada is really committed to advancing common goals long term in the Indo-Pacific.
We should also not lose sight of what the endgame is for us in our global pursuit and perhaps walk back from that point in contemplating our steps to get there. If the ultimate aim is peace and security, peace and prosperity or, at a minimum, survival of humanity and our planet, we shall try to avoid a binary, value-based approach, where we only see things through the lens of good versus evil, democracy versus autocracy, which implies that confrontation is inevitable. It is not a shared perspective by the majority of the world's population, especially not by countries in the Indo-Pacific.
Perhaps capitalizing on our past success as a visionary and a thoughtful middle power and bringing back a nuanced approach and pragmatism in our foreign policy thinking might help us go further in the Indo-Pacific.
Thank you.