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Canada-PRC Relations

The Government of Canada recognizes the growing international importance of China and works to enhance Canada's relations with this country of more than 1.3 billion people. Canada’s relationship with China is long-standing and dates from well before the establishment of diplomatic relations in 1970. Through a variety of initiatives, Canada supports work in China on the rule of law, women and children, peaceful pluralism and respect for diversity. We are also actively promoting international norms and values.

Two Canadians living in China, Michael Kovrig and Michael Spavor, have been charged there with espionage in retaliation for the detention of Huawei executive Meng Wanzhou in Canada. Beijing subsequently also imposed restrictions on Canadian meat imports in June 2019, but these were lifted five months later after an outbreak of swine fever drove domestic pork prices unsustainably high.

China remains off the radar scope for most Canadians and not central to Canada's fundamental foreign policy interests. Canadians appreciate new economic and trade opportunities with China, while recognizing that about 80 pct of their exports go to the U.S. market. They retain fundamental human rights concerns about China, with special concern about Tibet.

The Canadian Trade Commissioner Service has identified significant commercial opportunities for Canadian companies in a number of key sectors that are well suited to Canadian capabilities and interests. These include: aerospace, agriculture and agri-food, clean technology, education, mining and energy, engineering, design and infrastructure services, health services and life sciences. In addition to these priority sectors, important opportunities for Canadian companies exist in automotive and innovative transportation, information and communication technologies, consumer products, and tourism.

Strong people-to-people ties link Canada and China: over 1.8 million Canadian residents are of Chinese origin, and in 2018, more than 140,000 Chinese students attended Canadian educational institutions. Chinese is Canada’s third most spoken language after English and French, and immigrants born in China (including the Hong Kong Special Administrative Region) form one of the largest groups within Canada’s immigrant population. Growing tourism flows and ongoing cultural exchanges enrich bilateral linkages.

According to the 2007 results of an annual Department of Foreign Affairs survey, Canadians increasingly view China as important to Canada. The survey asked Canadians to list the two countries that they believed to be most important to Canada. The United States was most frequently listed, named by 35 percent of respondents. China came in second, at 25 percent. The previous year, China was in third place, listed by only 16 percent of those polled.

Canada pursued "structured partnerships" where Sino-Canadian interests converge, while nonetheless maintaining a "respectful and firm" approach where they clash. Canada intended to keep its policy of "firm and frank dialogue" in areas where the two countries disagree, most notably in human rights and democracy.

China suspended its human rights dialogue with Canada in 2006 after Parliament conferred honorary citizenship upon the Dalai Lama; PM Harper then welcomed him to Ottawa in October 2007. The dialogue remained in suspense. Canadian law insulates the refugee application process completely from political considerations, and the Canadian public would expect decisions on these and other refugee cases solely on their merits.

The 2008 election campaign platforms of both the ruling Conservative Party and the Official Opposition Liberal Party included only brief references to China. The Conservatives indicated that they would proceed with plans to open a trade office in China and other growing markets, but also promised to establish a new non-partisan democratic promotion agency (without linking this new agency with China specifically). The Liberals promised to "rebuild the economic and diplomatic relationship between Canada and China, a relationship frayed by Conservative grandstanding and showmanship" and to "give this relationship increased priority," notably to obtain "Official Destination Status" so that more Chinese tourists would visit Canada. The Liberals also announced that, if victorious, they would establish "Canadian Centres for Democracy" -- starting in the Middle East -- but did not indicate if they would seek such a center in China.

Many Canadians viewed the 2008 Beijing Summer Olympics through the prism of Canadian preparations for the 2010 Vancouver Winter Olympics, and were deeply impressed by the smooth success of the sporting events in China, as well as by the dramatic new sporting venues. The Beijing Olympics received widespread and generally positive media coverage, not exclusively on events featuring Canadian athletes but also more broadly. There were nonetheless negative reports about internet restrictions, empty demonstration zones, the deception over the singing during the opening ceremony, the possibility that some Chinese gymnasts were underage, and chronic problems with air pollution.

In mid-January 2009, Department of Foreign Affairs and International Trade (DFAIT) North Asia Director General Phil Calvert began briefing inter-agency colleagues to raise awareness of a new Canadian strategy on China that will emphasize more high level bilateral contacts. Canada's broad strategic objectives regarding China remained fundamentally the same, and Canada continued to seek to maximize economic opportunities and effectively pursue long-term interests8 in China while promoting Canadian values on human rights and democracy. However, economic issues are the engine for relations with China. Canada recognized clearly that China was a key driver with impacts on economics and finance, geopolitical security, environmental concerns, and social issues.

Canada's bilateral trade with China reached a value of 85 billion Canadian dollars (64 billion US dollar) in 2016, and Canada's two-way foreign direct investment with China stood at almost 34.7 billion Canadian dollars (27 billion US dollars) at the end of 2016. China was Canada's fastest-growing tourist market and the biggest source of overseas students. The average annual growth rate of Chinese tourists to Canada had remained around 20 percent, and more than 620,000 Chinese tourists visited Canada last year. Chinese students are the largest group of international students on Canadian campus, totaling about 180,000 in 2017.

China dramatically altered its international investment policy, pulling back on its plans for direct participation in Canada’s oilsands and withdrawing its support for Enbridge Inc.’s $4-billion Gateway Pipeline Project to deliver bitumen and synthetic crude oil to the west coast. A significant amount of oil was sent to China near the end of 2018 when the price was very low, and it stopped the moment the Alberta Premier curtailed production and the price returned to normal. China bought 6.56 million barrels of crude (12 tanker loads), or almost one-third of all the crude shipped out of B.C. in 2018. According to Port of Vancouver records, China imported crude from B.C. every year between 2008 and 2018, except 2016 and 2017. By 2020 nearly 98% of Canada's oil exports went to the US.

Ties between the two nations became strained since Canadian police detained Meng Wanzhou in December 2018 on a US extradition warrant. As charged in the indictment, Huawei and its Chief Financial Officer Meng Wanzhou [daughter of Huawei founder Ren Zhengfei] broke US law and have engaged in a fraudulent financial scheme that is detrimental to the security of the United States. Meng was charged with bank fraud, wire fraud, and conspiracy to commit bank and wire fraud.

The charges in this case relate to a long-running scheme by Huawei, its CFO, and other employees to deceive numerous global financial institutions and the U.S. government regarding Huawei’s business activities in Iran. Beginning in 2007, Huawei employees lied about Huawei’s relationship to a company in Iran called Skycom, falsely asserting it was not a subsidiary of Huawei. The company further claimed that Huawei had only limited operations in Iran and that Huawei did not violate U.S. or other laws or regulations related to Iran. Most significantly, after news publications in late 2012 and 2013 disclosed that Huawei operated Skycom as an unofficial subsidiary in Iran and that Meng had served on the board of directors of Skycom, Huawei employees, and in particular Meng, continued to lie to Huawei’s banking partners about Huawei’s relationship with Skycom. They falsely claimed that Huawei had sold its interest in Skycom to an unrelated third party in 2007 and that Skycom was merely Huawei’s local business partner in Iran. In reality, Skycom was Huawei’s longstanding Iranian subsidiary, and Huawei orchestrated the 2007 sale to appear as an arm’s length transaction between two unrelated parties, when in fact Huawei actually controlled the company that purchased Skycom.

China repeatedly accused Canada of acting as an accomplice of the US in the incident. On 27 May 2020, the Canadian British Columbia Supreme Court ruled on the so-called "double criminality" in the case of Meng, holding that the U.S. extradition request against Meng conforms to the principle of "double criminality." China expressed strong dissatisfaction and firm opposition to a Canadian court's ruling on the case against Huawei's chief financial officer Meng Wanzhou, and has made solemn representations to Canada on the issue, Foreign Ministry spokesperson Zhao Lijian said.

Michael Kovrig and Michael Spavor are two Canadians who were detained on 10 December 2018 on charges of engaging in activities endangering China's national security. The arrest of the two men in China is widely regarded as retaliation against Canada for arresting Meng. They were formally arrested on May 6, 2019 on national security grounds. At the time of his arrest, Kovrig worked full-time for the International Crisis Group in North East Asia. He had previously worked for Global Affairs Canada in a China-facing role. Michael Spavor is the founder of a Paektu Cultural Exchange, focused on opening up international ties with North Korea. Spavor has been photographed several times with Kim Jong Un and is one of only a handful of Westerners to meet the leader.

Prime Minister Justin Trudeau said on 04 July 2020 he was suspending Canada's extradition treaty with Hong Kong. On the same day, Canadian Foreign Minister Francois-Philippe Champagne said in a statement that Canada will halt exports of sensitive military goods to Hong Kong and had updated its travel advice for the city.

The Chinese Foreign Ministry issued a travel alert for Canada on 07 July 2020 on the WeChat messaging app platform, citing security concerns. Violence by law enforcement agencies occurred frequently in Canada recently, and has caused several demonstrations, according to the statement. The Foreign Ministry and Chinese diplomatic missions in Canada have alerted Chinese citizens to pay close attention to the local security situation and exercise caution when traveling to the country, it said.

The Canadian Government warned : "Chinese authorities may define certain behaviours and activities as “endangering national security” that would not be considered as such in Canada. If you are suspected of endangering national security, you will be subject to questioning. Chinese authorities may detain you for up to 6 months before you are formally arrested. Note that access to legal representation is frequently denied in the initial stages of a national security case, and trials often take place in closed court."

The Canadian leader said in an interview on 13 October 2020 that "We will remain absolutely committed to working with our allies to ensure that China's approach of coercive diplomacy, its arbitrary detention of two Canadian citizens alongside other citizens of other countries around the world is not viewed as a successful tactic by them." On the same day, Canadian Foreign Minister Francois-Philippe Champagne said in a statement on the 50th anniversary of Canada-China diplomatic ties that "As we build a new framework for relations with China ... The use of coercive diplomacy causes Canada to re-examine its approach."

The Chinese Foreign Ministry Spokesperson Zhao Lijian stated: "First, why hasn't it been able to acknowledge that the difficulties in China-Canada relations in recent two years are caused by Canada's arbitrary detention of Meng Wanzhou, an innocent Chinese citizen who hasn't breached any Canadian law?" Zhao asked. "Second, of all the U.S. allies, why was Canada the only one that agreed to cooperate with the U.S. on detaining Meng Wanzhou? Third, why has Canada been secretive about the information disclosure of the Meng Wanzhou case and doing all they can to prevent more related documents from being made public?"

China's ambassador to Canada warned Ottawa that granting political asylum to democracy activists fleeing Hong Kong could place at risk the 300,000 Canadians in the city. "We strongly urge the Canadian side not [to] grant so-called political asylum to those violent criminals in Hong Kong," envoy Cong Peiwu told a video news conference marking the 50th anniversary of ties with Canada. Cong said the granting of asylum constituted interference in China's internal affairs, and would "embolden those violent criminals." Cong said "If the Canadian side really cares about the stability and the prosperity in Hong Kong, and really cares about the good health and safety of those 300,000 Canadian passport holders in Hong Kong ... you should support ... efforts to fight violent crimes".

"There is no coercive diplomacy on the Chinese side," Cong said. "The Hong Kong issue and the Xinjiang-related issue are not about the issue of human rights. They are purely about internal affairs of China, which brooks no interference from the outside."

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Page last modified: 06-05-2021 17:06:28 ZULU