What Should Canada Do About the Chinese Government?
We need to address our problems both internally and externally
In last week’s issue of this newsletter, I explained why I favour trade barriers against the Chinese government, despite my continuing skepticism of the merits of strategic trade barriers in general. Now I want to explore some specific ways all levels of government (federal, provincial, and municipal) can not only respond to the Chinese government’s aggression against Canada, but also change how our systems operate to avoid foreign interference from any country.
But before moving on, I encourage you to please consider a paid subscription to this newsletter, as it will help me to afford the time and other resources to conduct this kind of research. Regardless, I am happy you are here!
Update on Relevant News Over the Last Week
Closed-Door Probes and Demands for a Public Inquiry
When I published last week’s issue of this newsletter, Prime Minister Justin Trudeau had just announced the initiation of two closed-door probes into Chinese election interference, which will be reviewed by a special rapporteur. Now as of yesterday, The Globe and Mail’s Robert Fife and Steven Chase report that former governor-general David Johnston was named special rapporteur.
Matt Gurney of The Line notes this is a controversial appointment because Johnston has been accused of being too close to Trudeau, given the fact he is a member of the Pierre Elliott Trudeau Foundation, and also since Trudeau has described him as “a family friend”. At the very least, Chris Selley of the National Post and Conservative MP Michelle Rempel Garner both argue that Johnston has the appearance of partiality, even though, as John Ibbitson points out in The Globe and Mail, Conservative Prime Minister Stephen Harper appointed him Governor General in both 2010 and 2015.
For more on Johnston’s background, see today’s Substack post from Paul Wells here.
There have also been calls for the Prime Minister’s Chief of Staff, Katie Telford, to testify before a Commons committee studying the Chinese government’s interference in our elections. When I published last week’s issue of this newsletter, there was an NDP motion to do just that, but Liberal MPs filibustered to block the motion.
Since then, Robert Fife of The Globe and Mail reported that as of March 14, these MPs extended their filibuster for a fourth day, arguing political staff should not be forced to appear before parliamentary committees. Ironically, these same MPs accused the opposition of playing political games while at the same time preventing a vote “by reading newspaper articles, talking about their university days and overseas travel”.
Overall, there are eight arguments Liberal MPs and their supporters have made against a public inquiry, as summarized by the Editorial Board of The Globe and Mail: (1) it will take too long; (2) it will be too costly; (3) it is redundant; (4) our allies will not like it; (5) expectations are inflated; (6) it is dangerous; (7) Canadians are ill-informed; and (8) too much information is classified.
I will write more on why these arguments are unconvincing later in this post.
More Evidence of Chinese Government Interference in Canada
In other recent news, Fife and Chase reported that according to a federal government source, Foreign Affairs Minister Mélanie Joly rejected a visa for a Chinese diplomat in the fall of 2022 when her department determined the Xi government was sending a political operative to conduct foreign-interference operations in Canada.
Then in a later story, the same authors wrote that according to Joly, it would be more difficult to expel diplomats who are already in Canada without sufficient evidence of foreign interference. She also expressed her hesitation of provoking a tit-for-tat reaction from the Chinese government which “could harm Canada’s ability to have ‘eyes and ears’ on the ground in China.” In response to these arguments, Conservative Foreign Affairs Critic Michael Chong cited Article 9 of the Vienna Convention, which does not require such evidence for a country to expel diplomats.
While much of the news about Chinese interference in Canada is in regard to federal elections, it is not restricted to federal politics, nor is it restricted to any one political party. For a case in point, Sam Cooper reports for Global News that according to sources, “Vincent Ke, a Progressive Conservative member in Premier Doug Ford’s government since 2018, served as a financial intermediary in Chinese Communist Party (CCP) interference schemes described in two separate Privy Council Office intelligence reports reviewed by Global News.” Ke has denied these allegations.
Then there is the municipal level of government, as Robert Fife, Steven Chase, and Nathan VanderKlippe reported in The Globe and Mail today that “China’s diplomatic mission in Vancouver has actively interfered in the city’s politics, using proxies in diaspora community organizations and grooming politicians to run in last fall’s municipal election, according to Canada’s spy agency.”
In fact, the interference is not even limited to governments and elections. As Mitch Heimpel writes for The Line, CSIS briefed “just about anyone who would listen” about attempts by the Xi government to interfere with, and influence, the function of core Canadian institutions including financial institutions, telecommunications companies, and universities. Such interference also includes attempts to intimidate Chinese-Canadians who might say or do anything contrary to the wishes of the Chinese Communist Party.
On that note, the Canadian Press recently reported two Quebec community groups (Chinese Family Service of Greater Montreal in Chinatown, and the Centre Sino-Quebec de la Rive-Sud located in Brossard) are under investigation by the RCMP’s Integrated National Security Team for allegedly operating as secret police stations for the Chinese government. These stations are described as overseas outposts whose purpose is to “persuade” people considered by Chinese authorities to be fugitives, to return to China to face charges.
TikTok Banned on Government-Issued Devices
In social media news, Laura Stone reported for The Globe and Mail that the Ontario government banned TikTok on all government-issued devices, as well as on personal mobile devices of the Ontario PC caucus. Ontario was the last province to do so.
This is an important move by these governments because the Xi government has a stake in TikTok’s owner, ByteDance, and Chinese law allows that government to demand access to user data. Therefore, it is difficult to take TikTok seriously when it argues the “company that owns TikTok maintains it does not share data with China’s government and its data is not held in that country.” But even if it does not now share data, and even if the data are not held in China, the Chinese government can still order the data to be delivered to it at its whim.
For that reason, a coalition of Canadian privacy protection authorities, including the Office of the Privacy Commissioner of Canada, recently announced it is investigating TikTok. That investigation will determine whether the app’s practices comply with Canada’s privacy laws. Moreover, earlier this year, a House of Commons committee agreed to begin a study of how social media platforms (including TikTok) are using Canadians’ personal data for “data harvesting and unethical/illicit sharing of personal information with foreign entities.”
Chinese Economy Is Becoming More Centralized
In a blog post for the Council on Foreign Relations, Carl Minzner writes about reforms being made in China in terms of the “re-Partyization” of China’s bureaucracy. While the post-1978 reform era saw Party authorities deviate from Mao Zedong’s micromanagement of the state’s day-to-day affairs, Xi is steadily moving Beijing backwards, “reflecting his priority on centralization and absolute Party control over state and society alike.” Once again, this indicates we should not take anyone seriously when they say that our data are safe from the Chinese government.
Further evidence of Xi’s centralization of China’s economy comes from Fife and Chase, who report that Guy Saint-Jacques, a former Canadian ambassador to China, said Chinese officials have only recently started putting their party affiliation on their business cards, which is something he never saw when he was posted there. This centralization of power is important for several reasons, but one is to reiterate that Chinese people should not be held responsible for their government’s actions, since it is a dictatorship that cracks down hard on dissidents.
Chinese Government Shows Some Vulnerability
Despite the authoritarian nature of the Chinese government, and despite their bluster about how they will not allow foreign countries to tell them how to do their business, Fife and Chase report that Xi’s government does still seem to care about maintaining good relations with us. Indeed, a Communist Party official named Wang Shouwen led a delegation to Ottawa this week where he met with senior bureaucrats from several government departments. Wang serves as Vice-Minister in China’s Ministry of Commerce as well as China’s International Trade Representative. According to sources, Wang met with David Morrison (Deputy Minister of Foreign Affairs), Rob Steward (Deputy Minister of International Trade), and Senator Peter Boehm (Chair of the Senate Committee on Foreign Affairs and International Trade) while he was here.
Moreover, Boehm revealed Wang told him this trip to Canada was not part of a separate visit to the United States; it was focused on Canadian meetings alone, so “They are obviously on a charm offensive of some kind”. A potential reason for the Chinese government’s desire to have friendlier relations with Canada include wanting our support in its application to join the Trans-Pacific Partnership (TPP); it also wants Ottawa to not support Taiwan’s admission into the TPP.
Further indications of the Chinese government’s vulnerabilities were provided by Kelly McParland of the National Post last week, who wrote about problems facing China’s biggest property developer, China Evergrande, as well as the collapse of the country’s housing bubble. Then there are a myriad of problems with Xi’s Belt and Road Initiative, as well as last year’s population decline (the first one in 60 years), and problems stemming from its support of Russia’s war in Ukraine. McParland also highlights the fact that the U.S. government has publicly re-enforced its support of Taiwan. In summary, he writes:
In a democratic country it would be a record likely to bring about a swift replacement for a stumbling government. That’s not about to happen as Beijing maintains its belief in repression as standard practice. But it also doesn’t justify the apparent belief in some western quarters that this is a regime that knows what it’s doing and is good at achieving its goals.
Similarly, Diane Francis recently wrote in her Substack newsletter about “China’s Vanishing Wealth”, quoting “a former member of China’s elite” who said “nobody in their right mind will come into China now.”
Then there is a piece in Foreign Affairs by Damien Ma and Houze Song, in which the authors explain the Chinese government is concerned about its economy’s “many underlying vulnerabilities”, which include local government finances, the ailing property sector, and exports which are expected to fall in the event of a global recession. They then argue that a lack of domestic demand is an even bigger worry since Chinese people are well known to be big savers. The country’s demographic decline would make this consumption problem even worse.
All of these articles demonstrate the Chinese government is more vulnerable than it has been in a long time, so Canada has increased leverage to defend ourselves against its aggression.
How to Retaliate Against Chinese Government
Strategic Trade Barriers
So how can Canada most effectively hit China where it hurts? First, we need to know where our trade with China is most significant, because putting trade barriers where there is little-to-no trade will be pointless.
The easiest way to retaliate against China is to erect barriers on products and industries where our trade with China is most significant, and a good approach is the one Deputy Prime Minister Chrystia Freeland took when retaliating against former President Donald Trump’s steel tariffs in 2020 — as reported at the time by Alexander Panetta of CBC News, “Canada's list of potential targets threatens to hit politically sensitive areas — namely, states critical to U.S. President Donald Trump's re-election.”
Of course, there are no “re-elections” in China, but the general point remains the same: target products that will hurt China most while simultaneously hurting Canada the least. So we now need to figure out what products they might be.
With that in mind, I have used the Government of Canada’s Trade Data Online portal to find the top exports to China, as well as the top imports from that country, where the products are identified by HS6 codes. In summary, the top five exports in 2022 are as follows, where the six-digit numbers are the HS6 codes, and I have modified the product descriptions to avoid readers’ eyes glazing over:
270112 - Bituminous Coal
120510 - Rape or Colza Seeds
260111 - Iron Ores and Concentrates
470321 - Chemical Woodpulp
310420 - Potassium Chloride
Furthermore, China only accounted for 3.7% of our total worldwide exports of $777.03 billion in 2022, so limiting our exports to that country would harm Canada as a whole relatively little. As for specific Canadian industries which would be affected by these barriers, the Canadian government could provide some support to lessen their pain.
As for imports, I have chosen data for 2021 because the portal identifies the first- and sixth-ranked products as “N/A”, although it appears one of them could easily be cell phones. Regardless, a review of data over the past several years indicates the following five products would be good candidates for trade barriers with China:
847130 - Laptops
851712 - Cell Phones
851762 - Network Devices such as Modems and Routers
950300 - Children’s Toys, Puzzles, and Models
950450 - Video Game Consoles and Machines
Furthermore, China accounted for 13.5% of our total worldwide imports of $739.314 billion in 2022. This is much more than the proportion of exports identified above, but it is still fairly small, especially when one considers 49.1% of our imports in 2022 come from the U.S. alone (77.0% for exports). And these Canada/U.S. trade figures are even more relevant when one considers that our retaliation against Trump’s steel tariffs worked despite us being so much more dependent on trade with the U.S.!
Of course, the Canadian government has more resources to fine-tune the targets of trade barriers and how significant to make them, so the point of this exercise is to demonstrate where one might begin the analysis.
When Canada implements these trade barriers, it will help greatly to bring our allies on our side so the Xi government cannot simply substitute trade with Canada to other countries. But I think this is a reasonable expectation because our allies have already stood by our side when the “Two Michaels” were falsely imprisoned by the Chinese government. Furthermore, while trade barriers can sometimes be seen by the global community as being a bully tactic, there is basically no chance Canada would be seen by our allies as the bully in this fight.
For more analysis on specific sectors that Canada can target, see a recent issue of Noah Smith’s Substack newsletter in which he argues China will dominate where it can lever disruption, and its competitive advantage is in scale, not cost. Therefore he argues that China is “poised to dominate three types of industries”:
New technologies that begin in niche markets
Primary industries and simple manufacturing industries that require massive resource inputs to be profitable
Mid-tech industries where a lot of small innovations accumulate
Smith explains that all of these advantages exist in the EV industry, so this might be a good target for retaliation against the Chinese government. Then, of course there are the targets that have already been identified, including Huawei’s 5G technology and TikTok. Canada could also follow the lead of the U.S. government, which told Chinese owners of TikTok to either sell their shares or risk the app being banned in the U.S.
Sanctions on Chinese Government Officials and Diplomats
According to Charles Burton — senior fellow at the Macdonald-Laurier Institute, non-resident senior fellow of the European Values Center for Security Policy in Prague, and former diplomat at Canada’s embassy in Beijing — “China has 146 envoys accredited in Canada, compared to 46 from Japan, 36 from India and 23 for the UK.” So there is a good starting point for sanctions.
Earlier, I noted that Foreign Affairs Minister Mélanie Joly admitted to denying a visa to a Chinese agent, and despite what she said, Conservative Foreign Affairs Critic Michael Chong argued that under the Vienna Convention, we do not need evidence to expel them. I would certainly not argue for expelling people with no evidence, but if we have legitimate suspicions (such as when they brag about influencing our elections take our citizens hostage), we should sanction them specifically.
Increase Support for Taiwan, Hong Kong, Tibet, and the Uyghurs
Next, there are the victims of the Chinese government in Taiwan, Tibet, and Hong Kong, as well as the Uyghurs and other Turkic minorities. For example, Jimmy Lai ran the Apple Daily and was sentenced to more than five years in jail in December, a year after his publication was forcibly closed. Contrary to the actions (and inaction) of previous Canadian governments under both the Liberals and Conservatives, Canada needs to be stronger in its support for these victims, like we (briefly) did after the Tiananmen Square massacre in 1989.
For example, we can agree to more readily accept refugees from these groups, and also develop closer relations with Taiwan, including recognizing its independence and supporting its inclusion in the TPP. Obviously, the Xi government will make a lot of threats if we follow through with these actions, but with the U.S. becoming more open with Taiwan, we would have a very strong ally on our side.
On that note, Tara Subramaniam writes for CNN that President Xiomara Castro of Honduras is caving in to pressures by the Chinese government to break off relations with Taiwan. If so, then there will only be 13 countries in the world that still recognize Taipei over Beijing diplomatically, most of which are small nations in the South Pacific and Latin America. The Associated Press provides more information on this issue here, including the following on how China retaliates against countries who have relations with Taiwan:
China expelled Lithuania’s ambassador, downgraded diplomatic ties and blocked trade with the Baltic country of 2.7 million people after it boosted relations with Taipei in October 2021. Lithuania has since closed its embassy in Beijing and opened a trade office in Taiwan.
But again, it looks like we would have a strong ally in the U.S. if we become more friendly with Taiwan.
Of course, we should not shut the Xi government out completely and/or irreversibly, because we want to create conditions whereby we will relax our sanctions and barriers with if the Chinese government improves the way it operates. But we need to make sure that they really do what they promise they will do, as opposed to when Prime Minister Jean Chretien made a deal with the Chinese government at the turn of the century to improve human rights for Chinese citizens; as I explained in my post last week, once we gave the Chinese government what it wanted, it no longer had any incentive to follow through on its end of the bargain.
And I want to reiterate that we need to put as much of the punishment on Chinese government officials rather than Chinese citizens, who are innocent victims of this whole mess. But it is difficult for me to believe that sanctions or trade barriers will hurt these people more than they are already being harmed by Xi.
Strengthening Our Defenses Against Any Foreign Interference in Canada
More Transparency
Given everything I have written so far, I want to make clear this post is not just about retaliating against the Chinese government; we also need to change the way our governments operate, and one important change is to create more transparency. With this in mind, Mitch Heimpel writes for The Line that in the U.S. in 1974, the Senate realized “that having an intelligence agency that could operate entirely in secret, whose culture was increasingly clubbish and insulated, was fundamentally cancerous to a democratic society.”
He then writes:
We send members of Parliament to Ottawa, vest them with extraordinary constitutional investigative powers, and then have public servants appear in front of them to inform them that they will refuse to answer certain questions. It feels as though we far too often have to remind those in power, elected or unelected, that they are required to govern with the consent of the governed. And there is no such thing as “uninformed consent.”
This brings us back to arguments made by Liberals against a public inquiry, as well as against questioning Trudeau’s Chief of Staff, Katie Telford. On this debate, the National Post’s John Ivison writes that while there are normally good arguments for questioning elected officials rather than their unelected staff, Telford might be the only person who has all of the relevant information in this case — the reason being her job is to protect her boss from potentially incriminating information by giving him plausible deniability. In fact, she has admitted in the past to keeping Trudeau in the dark about serious misconduct allegations in the Vance case, and Ivison refers to one security source who said past Prime Ministers made it clear they did not want to know these kind of details, lest their future action be constrained.
The Editorial Board for The Globe and Mail also had some good counterarguments to the Liberals on opposing the public inquiry, and I agree with all of them.
Of course, there are valid reasons to keep some matters secret for the sake of national security; as Mélanie Joly argued, we sometimes do not want to tell the Chinese government what we know and how we found out about it. But that argument is too often being used as an excuse to keep everything secret, and it sounds too much like “quiet and let the adults talk”. When too many secrets are kept, it breeds contempt and distrust and that needs to be avoided.
Listen to Diaspora Communities
In an article for TVO Today, Matt Gurney writes we should probably start looking at other diaspora communities in addition to Chinese-Canadians, such as the Iranian-Canadian community, because they are the primary targets and victims of this kind of interference. As he correctly argues, “These new Canadians have chosen to build new lives here, and we owe them our protection and trust.”
And part of listening to these communities is to not call everyone who worries about the actions of the Xi government (or other similar governments) of being racist. As Adam Zivo writes for The Line, these tactics only parrot the talking points of Xi, such as when he accused the Trump administration of “racial discrimination” for supporting the 2019 Hong Kong protest movement, even though the beneficiaries of this support were Hong Kongers themselves. Similarly, Zivo asks whether Canadian Uyghur activists are racist for opposing the Chinese government.
Some further quotes from Zivo’s piece which are worth repeating here:
“Folks who claim to be standing up against anti-Asian hatred and racism, please, listen to your constituents and Asian voices,” said Tibetan activist Chemi Lhamo, who added that, “As an Asian woman, there is a bigger target on my back, and conflating the idea of anti-CCP with anti-Asian is actually a much bigger disrespect.”
Rukiye Turdush of the Uyghur Research Institute concurred. He called Trudeau “confused” and said that, “If we're against the CCP, it doesn't mean we're against the Chinese people. It has nothing to do with anti-Asian racism. I really didn't get why he said that.”
Improve Nomination Rules
Another part of the solution is to improve the nomination rules. Karen Woods, co-founder of the Canadian Chinese Political Affairs Committee, wrote for the National Post that most parties allow 14-year olds to vote in nomination and leadership contests, and these voters do not even need to be full citizens of Canada — just permanent residents. It is therefore possible for candidates to go to immigrant communities to recruit new members who might not speak English or understand party policies, and pay for their memberships in cash.
Therefore, the author suggests raising party voting ages to 18, as well as new rules increasing the amount of time someone must be a paid member before casting a vote in a leadership or nomination race.
Woods then argues that money is the second big problem with nomination races, because it can cost at least $100,000 to run a serious campaign and pre-writ spending is unlimited. This makes candidates vulnerable to big donors who expect something in return for their donations. Therefore, she recommends bringing back the per-vote subsidy that was removed in 2015, as well as providing public funding to candidates in nomination races. After all, if we eliminate the attraction of large private donations, that will go a long way toward reducing foreign influence on campaigns.
Foreign-Agent Registry
A foreign-agent registry is also a good idea. In a piece for The Globe and Mail, David Mulroney (Canadian ambassador to China from 2009-12) advocates for an Australian-style foreign agent registry in Canada, which is designed to include the names of everyone who is delivering the Chinese government’s talking points, disbursing its payoffs, and lobbying on its behalf. He argues that such a list would likely include residents of Ottawa “where many former ministers and mandarins remain after retirement to run associations, represent major firms, opine on nightly news panels, rub shoulders with serving officials and, in some cases, advance agendas on behalf of foreign paymasters.”
It is a great article and I do not want to over-quote it, so I recommend you read it in full. But the last line is still worth quoting here: “Setting up a registry of foreign agents is in no way racist. But assuming it would contain only Chinese names is.”
It is still important to be careful when setting up this registry, however, because as James Yan writes in the National Post, “An overly aggressive approach which casts all media that advance Beijing’s position as foreign agents would be misguided and undemocratic.” He uses the example of a journalist who makes a good-faith argument that Taiwan is part of China. But he also argues that the Canadian government should still not accept all claims of media independence without scrutiny, such as with Canada’s most influential Chinese-language newspaper, Sing Tao, which was instructed by the U.S. government in 2021 to register as a foreign agent because its controlling owner was too friendly with the Chinese government.
Concluding Remarks
A necessary condition for any positive change to be made is for voters to make their views known to their elected representatives. Otherwise, these representative use the silence as an excuse to say no one cares — and they are making this excuse now.
So I urge you to contact the politicians who directly represent you. Since the Chinese government’s interference in Canada is happening at all levels of government, we need to contact the people who represent us federally, provincially/territorially, and municipally. You can find your federal MP and their contact information here.
Since this is a foreign policy issue, I also urge you to contact the Minister of Foreign Affairs, Mélanie Joly, as well as the CPC and NDP Foreign Affairs Critics, who are Michael Chong and Heather McPherson, respectively. Let them know how you feel about the Chinese government’s interference in our elections, as well as in our other core institutions.
Most importantly, please be respectful in all correspondences.
In addition, spread news from legitimate sources such as the ones I cite so that other people can stay informed on these issues. On that note, I hope you will share this post as well.
Finally, please support Chinese-Canadian communities who deserve no blame for any of this mess. They have faced a lot of racism over the pandemic and the actions of the Chinese government, and they do not deserve it. While many of them are bravely protesting against the Chinese government, many others have little choice but to stay quiet due to threats from secret police stations in Canada, as well as Xi government threats against family and friends who are still in China.
I am not naive: I have doubts based on 50 years of evidence that Canada’s government will do what needs to be done to fight back against Chinese government aggression. But that is no excuse to be apathetic, as then there will definitely be no positive change.
Thank-you for reading to the end of this post, and I hope to see you again next week.