Canada-China Brief: New Taiwan appointment, G7 trade warning on China & more

This week's edition covers Canada's diplomatic appointment of its Beijing envoy to Taipei, G7 trade commitments to take a tougher stance on China, and more.  

First, here's the latest from IPD:

IPD's Roundup

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Expert Analysis

On Canada-China trade and strategic attempts at diversification:

Many sectors in Canada (both for goods and services) are dominated by small and medium-sized companies that benefit from market entry and other government export support. Not surprisingly, many focused their initial efforts in Asia on the China market given its scale and rapid development. Expansion into other Asian markets makes sense but depends on specific capabilities and opportunities and will require significant effort by businesses and the government. Recent proposals that Canadian companies exit China and develop “alternate” markets in Asia are misguided — akin to selling only to Latin America while avoiding the U.S. market.

For Canadian agricultural exports, China is the world’s marginal buyer; the U.S. is a key competitor.  Canada needs both more Chinese and more Asian customers. Strengthened trade relationships are a key step to establishing a stable Canada-China relationship and reviving our previously strong relationships across the region. 

— Margaret Cornish, Advisor, Institute for Peace & Diplomacy

Top Stories

Ottawa sends former Beijing chargé d'affaires to Taipei

Ottawa has reportedly decided to appoint Jim Nickel, Canada's former top-serving diplomat in Beijing, as the new executive director of the Canadian Trade Office in Taipei. Nickel's departure from Mainland China simultaneously leaves the posts of Ambassador and Chargé d'Affaires in Beijing vacant.

A hailed move — Former Canadian diplomats praised Ottawa's selection as Nickel succeeds Jordan Reeves in Taiwan:

• Guy Saint-Jacques, former Canadian Ambassador to China, commented that Nickel's experience in Beijing will make him "an important person to provide advice back to Ottawa," intelligence on Chinese activity against Taiwan, and input into the Indo-Pacific strategy under works.
• David Mulroney, another former Canadian Ambassador to China, also applauded the decision, stating that Nickel was "exceptionally competent" and well-fitted to manage one of Canada's "larger and more important posts in terms of staffing, the significance of our interests, and the complexity of the issues."
• Gordon Houlden, Director Emeritus of the University of Alberta's China Institute, said Nickel "will do a fine job in Taipei" and speculated that an "announcement of [a] new [ambassador] to [the] PRC must be close."
• Margaret McCuaig-Johnston, a Senior Fellow at the University of Ottawa's Graduate School of Public & International Affairs also called it a "fantastic appointment" and that "there are great female diplomats at Global Affairs Canada so there will be good candidates for the Beijing post."

Coincidence of timing? — Nickel's appointment comes amid friction with China over the upcoming visit of Canadian parliamentarians to Taiwan:

• A formal complaint had previously been lodged by the Chinese Embassy in Ottawa to Global Affairs Canada, exclaiming that "China firmly opposes any form of official exchanges" and "[urging] the Canadian side to abide by the one-China principle."
• Noting the complaint, Liberal MP Judy Sgro stated that "I don’t think we should be bullied by anybody" and that the trip is about "enhancing democracy and respect for democracy and building relationships. We are not going there to comment on what China does."
• Canada's Embassy in Beijing separately posted a photo of North American and Oceanian Affairs Deputy Director General Yao Wen of the Chinese Ministry of Foreign Affairs who "thanked Chargé d’Affaires Jim Nickel for his four years serving Canada in China."

Canada, G7 agree to take a tougher trade stance on China

International trade minister Mary Ng recently participated in the G7 Trade and Investment Ministers’ Meeting held in Neuhardenberg, Germany. There, Ng agreed with G7 counterparts to take a tougher trade stance against China, though Beijing was not explicitly mentioned.

Rules, rules, rules — The post-meeting statement detailed the meeting's primary focus on strengthening the world's rules-based trading system:

• Along with pledges to WTO reform, it criticized “unfair practices, such as all forms of forced technology transfer, intellectual property theft, lowering of labor and environmental standards to gain competitive advantage, market-distorting actions of state-owned enterprises" and more.
• The group added that "we are seriously concerned by the use of trade-related economic coercion, which undermines economic security," vowing to "explore coordinated approaches to address economic coercion both within and beyond the G7."
• In a readout, Minister Ng reiterated Canada’s support for "cooperative efforts on WTO reform, the modernization of international trade rules, the sustainability and resiliency of supply chains, and market distortions related to industrial subsidies and the practices of [SOEs]."
• Ng also conducted bilateral meetings with the EU's Executive VP Commissioner for Trade Valdis Dombrovskis, Japanese Economy, Trade, and Industry Minister Yasutoshi Nishimura, and Japanese State Minister for Foreign Affairs Kenji Yamada.

Tough on China — While not in the joint statement, German Vice Chancellor and Economic Affairs Minister Robert Habeck called out China in the media: 

• He stated that "naivety toward China is over" and that he would push the EU for  “a more robust trade policy toward China and respond as Europeans to the coercive measures that China takes to protect its economy" as "other partner countries will do exactly the same."
• Prior to the G7 meetings, Habeck said "we cannot allow ourselves to be blackmailed," observing that “if [the Chinese market] were to close, which is not likely at the moment... we would have extreme sales problems."

Canola case suspended — Canada and China also recently agreed to halt a WTO dispute panel over restrictions on Canadian canola that have lifted:

• A spokesperson from Minister Ng's office told Politico that Ottawa was pleased with the resumption of the canola trade and that "as a result, we are suspending our WTO case, but remain ready to proceed if warranted."
• Bill Kerr, an agricultural economist at the University of Saskatchewan, noted that "the whole [WTO] dispute system doesn’t really work now" due to the U.S. blocking WTO judge appointments under which Beijing "can’t appeal" and would have chosen to "just ignore the ruling" if Canada won.

What They're Saying

A generational change in leadership is coming both in the United States and in China. This will occur in a radically reshaped economic and technological context — and one in which the issues that demand cooperation — ranging from climate change to the governance of artificial intelligence — will put a premium on cooperation. As the current crisis in US-China relations blows over, it would be wise for US and Chinese parties to start a track-two dialogue on a reset. China and the United States are not natural enemies. China is not going away. Neither is the United States. A modus vivendi is required.

— Dan Ciuriak, Senior Fellow, Centre for International Governance Innovation

Before we go on a trip [to Taiwan] like this, I wouldn’t attend until I had a proper briefing first, so I really understood the consequences of a visit like this... We need to have our eyes wide open and understand exactly what the goals of the trip are and what the consequences of the trip would be.

— Randy Hoback, Conservative Member of Parliament

Although still wedded to a ‘generalist’ philosophy, one area where Global Affairs has clearly identified a need for greater depth of subject-matter expertise is China. Reputedly the brainchild of then-Ambassador to China Dominic Barton, who had argued that “Canada should have the strongest China desk in the G7”, the ‘China Capacity Project’ launched in 2021 found that the department’s expertise on China, including its Mandarin-language talent, was skewed toward the trade stream and deficient in the area of political and regional analysis. 

— Ulric Shannon, Former Canadian Ambassador to Iraq

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NEWSLETTER BY PETER HUANG AND JOHNSEN ROMERO