Seeking a Strategic Vision for Canada-China Relations

In celebrating the 25th anniversary ofthe establishment ofthe Asia Pacific Foundation of Canada, a key task is to reflect critically on Canada-China relations. As a rising global superpower and Canada's second-largest trading partner, China is rapidly becoming one ofthe most important countries for Canadian foreign policy. Canada's relations with China have undergone memorable and significant developments in recent decades. Ottawa opened trade with China in the early 1960s by selling it wheat, a scarce commodity in the world's most populated country, which at the time was experiencing famine on a massive scale. In 1970, Prime Minister Pierre Trudeau established diplomatic relations with the People's Republic - ahead of most other western countries. The two countries have enjoyed steady improvements in bilateral ties over much ofthe past 40 years.Until the Conservatives came to power in early 2006 under the leadership of Stephen Harper, Canada's China policy was rather consistent and nonpartisan. This was the case under various Liberal governments and during the years when the Conservative government of Prime Minister Brian Mulroney was in office. Beijing had also viewed Canada as a friendly western power and, in recent years, increasingly as a potential market for China's dynamic modernization program. Chinese President Hu Jintao's visit to Canada in the autumn of 2005 marked a new height in bilateral ties. Both countries agreed to elevate their bilateral relations to a strategic partnership, a term that Beijing uses to define key close relations with countries around the world.But after the Conservatives took office in early 2006, Harper made unannounced and yet obvious changes to Canada's China policy. Ottawa stopped using the term strategic partnership to describe bilateral relations and removed China from the priority list of Canadian foreign policy. Harper has yet to visit China after three-and-a-half years in office.Nevertheless, there are also signs that the Conservative government is making major readjustments to its China file. Four federal ministers - of international trade, transport and infrastructure, foreign affairs, and finance - visited China over a four-month span this year, apparently to prepare the groundwork for Harper's visit to Beijing this fall. With such timing in mind, this article will review the rise of China as a global power and its implications for Canada, evaluate critical issues in Canada-China relations, and, finally, offer policy recommendations for a nonpartisan China policy.THE RISE OF CHINA AND ITS IMPLICATIONS FOR CANADAWhen the Asia Pacific Foundation was created a quarter of a century ago, China was just beginning its reform and open-door policy. China's story since then has been one of explosive economic growth and integration with the world. During this process, the state has changed from an ideologically driven communist apparatus into a market-oriented one. China today is the third-largest world economy, the second-largest trading nation, and the largest holder of foreign reserves. Beijing has become the largest debt holder of the United States, using much of its foreign earnings to purchase US treasury and other bonds and financing the US deficit economy. It also attracts the largest amount of foreign direct investment among the developing countries.All of this was driven by the Communist party of China and its push to modernize industry, agriculture, science and technology, and defence. Through a very competitive, cutthroat market economy, China has become deeply integrated into the world economy. China has the largest goods-andservices-to-GDP ratio among the major economies, much larger than that of Japan, South Korea, or other southeast Asian economies, with the exception of Singapore. This trend has accelerated since China entered the World Trade Organization in 2001.On the sociological level, however, China's growth story has also been about a very strong desire by ordinary Chinese to have a better life. …

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