Canada's Foreign Affairs Minister Mélanie Joly visit Beijing last week in the first visit to China from a Canadian foreign minister since 2017.Fred Dufour/The Associated Press
Jacob Cooke is the chief executive of WPIC Marketing + Technologies, a Beijing-based firm that advises global brands in Asian markets.
After years of tense diplomacy, Foreign Affairs Minister Mélanie Joly’s visit to Beijing last week promises to stabilize the Canada-China relationship.
That’s good news for Canadian business.
Every week I speak to several Canadian companies – from small and medium-sized enterprises to large multinationals, across a wide range of sectors – who are looking to China as a key growth market.
Before Ms. Joly, the last visit from a Canadian foreign minister to China came in 2017, when Chrystia Freeland ventured to Beijing to pursue a free-trade agreement. Those talks quickly fell apart. Soon after, the diplomatic relationship hit a nadir. China detained the “two Michaels” at the end of 2018 after Canada arrested the Chinese tech executive Meng Wanzhou on a U.S. extradition request.
The resolution of that crisis in the fall of 2021 did not result in a broader thawing of the relationship. Starting in 2022, tensions ratcheted up again when media reported alleged Chinese election interference in Canada. Beijing expelled a Canadian diplomat after Ottawa expelled one of China’s.
Despite these issues, it is in Canada’s interest to seek a renewed relationship with China.
China is Canada’s second-largest trading partner – but Canada is only China’s 18th largest. There is a fundamental complementarity between our two countries, but also a power imbalance. Canada does not benefit from confrontational posturing.
Especially with growth sagging at home, it is a strategic and economic necessity for Canada to pursue constructive engagement with China.
To casual observers, it might seem as though Canada is one of many Western countries in the throes of tensions with China. But in fact, Canada’s recent lack of high-level engagement with China has been singular.
Over the last 18 months, Australia has taken significant steps to mend its relationship with China and enhance its lucrative trading relationship. In June, China’s Premier Li Qiang visited Australia and New Zealand, following Foreign Minister Wang Yi’s visit to both countries in March and separate visits to China by the Australian and New Zealand prime ministers last year.
In Britain, the former Tory government of Rishi Sunak took a relatively tough stance on China, but still sent former foreign secretary James Cleverly to visit Beijing last August.
Even the Biden Administration, which has taken several trade actions against China, dispatched Secretary of the Treasury Janet Yellen and Secretary of State Anthony Blinken to Beijing in April, with a broad goal of stabilizing bilateral ties.
Looking beyond the Anglosphere, France welcomed President Xi Jinping on a state visit in May; German Chancellor Olaf Scholz stopped by Beijing in April.
A few common threads have run through all this bilateral diplomacy: promote mutually beneficial trade and exchanges and maintain high-level communication to manage disagreements. Canada’s diplomacy has simply been lagging.
Fortunately, over the last six-plus years of strained relations, only a few Canadian industries such as canola were caught in the crossfire.
Canadian exports to China hit a record high in 2023, growing by 6.17 per cent to $30.5-billion. China is one of the largest and fastest-growing markets for several of the product categories that dominate the Canadian economy. Those include agricultural commodities and value-added products such as canola, pork and seafood; minerals such as iron, copper and coal; wood and consumer goods across a range of categories, such as beauty and personal care, pet, vitamins, apparel, sports equipment and baby care.
Chinese demand for Canadian exports, encompassing industrial buyers and consumers, is robust. Product offerings from Canadian consumer brands align with Chinese consumers’ aspirations and preferences. China’s expanding middle class views the Canadian lifestyle, and its associations with healthy living, as desirable. Brands from Lululemon to Tim Hortons are benefiting enormously from these trends.
Canadian exporters have succeeded in China despite diplomatic tensions – but those tensions have created risk. And they prevent Canada from tapping the full potential of the trade relationship.
A free-trade agreement is unrealistic in the current context, but a study from the Business Council of Canada in 2018 found that such a deal would grow Canadian exports to China by $7.7-billion and create 25,000 jobs – adding to the 400,000 Canadian jobs that already result from Canada-China trade.
Making it easier for students, tourists, investors and workers to travel between the two countries – starting with increasing the number of direct flights – should be a priority as we start mending our relationship with China.