Getting China Right
Toronto Star, Tuesday, September 19, 2011
Reports that Prime Minister Stephen Harper will visit China later this year may yet be unconfirmed but it is a safe bet that the PM will again follow the path of the 40 or so ministers who have travelled to China since the reboot of Canada-China relations in 2009. Foreign Affairs Minister John Baird’s recent visit exemplifies the rising sophistication of the Harper government’s diplomacy in recognizing that values and interests are not incompatible, and both should be promoted with vigour.
The IMF this past April asserted that China’s economy will surpass that of the United States in real terms in 2016, neatly framing the years during which Harper’s majority government will set Canada’s China agenda.
That agenda will have to adapt to China’s evolving realities.
Even with continuing and impressive GDP and industrial growth rates, China will also have to address high and rising inflation; deflate an asset bubble in real estate; reframe the economy to be less dependent on exports and promote domestic consumption; and leave more space for dynamic domestic and foreign enterprises to compete successfully with domineering state-owned enterprises. It will also have to deal with the environmental costs of the first three decades of expansion. In other words, throw out the straight-line growth projections and adapt to a much more complex and variable economic environment.
China will be subject to regular systemic shocks. The Wenzhou high-speed train crash, unrest in Xinjiang, and large demonstrations against a chemical complex in the northeastern city of Dalian are examples of the kinds of challenges China’s leadership has to meet. The record here is mixed: serious flaws in the Ministry of Rail’s response to the Wenzhou disaster were followed by a conciliatory visit by Premier Wen Jiabao. The Dalian demonstrations have led to promises that the chemical plant will be moved. On the other hand, it is clear that the authorities have not found the means to address the aspirations of some of China’s minorities.
Let’s face it: China’s political evolution toward more transparent and legally based governance is a work in progress. There has been positive change: multi-candidate elections for local party committees, public access to budgeting processes, meritocratic advancement. Private media is straining against propaganda department strictures and debate and criticism in social media have been difficult for authorities to constrain. But potentially significant promises of greater “intra-party democracy” and “extra-party supervision” have not yet been kept, and environment for the promotion of human rights and fighting corruption is not measurably improving.
In the face of this great complexity, Canada will have to pursue foreign policies that keep a clear set of objectives in the forefront, adapt tactically to changes on the ground in China, and be patient in the long game. Policies must also be informed by respect for China’s history and achievements, and an acknowledgement of the immense challenges of governing what, as Niall Ferguson said in the recent Munk debate on China, is a continent.
In response to these multiple and evolving realities, Canada needs an equally broad set of China policies.
We need to think in terms of a people-focused China policy. Expanding the interaction between Canadians and Chinese should be a measurable objective. The number of visitors and tourists from China can be multiplied through advertising and increasingly sophisticated visa-granting systems. The provision of residential and other rights to business investors can be expanded. Graduate and undergraduate student recruitment to Canada, in a targeted manner, can be further encouraged through strategic collaboration between universities and colleges, and industry groups. Government should consider every visitor from China to Canada, no matter what the initial length of their stay or their objectives, as potential future immigrants, and structure rules to facilitate their long-term establishment in Canada.
The promotion of human rights should remain at the centre of our people-focused China policies, because these rights define Canada and Canadians. We should recognize China’s immense achievement in improving the economic well-being of its citizens, as well as assist those, in and out of government, who promote political rights.
We also need to pursue our economic interests, with the strategic vision that will place Canada, as we once were, among China’s key partners. Canadian businesses supported by successive governments have built a $50 billion relationship but to double that needs a robust new bilateral trade and investment architecture, strategic partnership for innovation, and much, much higher participation rates by Canadian businesses. In the immediate term, a foreign investment protection agreement is promised, but we should be more ambitious, aiming at the substance if not the form of free trade agreement, including provisions for facilitate investment, better access to services markets, protection of IP and so forth. And successful Canadian companies doing business in China should take it upon themselves to mentor firms that have not had the opportunity or the wherewithal to discover China’s potential for themselves. It’s one thing to get the framework right, another to get a greater number of companies engaged.
By all evidence, the next few years will not be an easy ride for anybody, even for Canada. Our success as a country will depend in part on our approaches to China, and the vision that will guide us.