In this issue: Feds order Chinese divestment in Canada’s critical minerals, Taiwan pushes for stronger ties with Canada, Indo-Pacific Strategy (now) to come early December and more.  

Feds order Chinese divestment in Canada’s critical minerals

Multiple Chinese companies with ownership stakes in Canadian critical mineral mines, including Vancouver-based Power Metals Corp. and Ultra Lithium, have been ordered by the federal government to divest their holdings in Canada, the Globe and Mail reports. The target companies on Ottawa’s list are small compared to the mega-Canadian critical mineral companies that have deeper ties with China. Bloomberg estimates at “least 27 public companies” have connections with “89 announced acquisitions and investments in Canadian metals and mining companies in the past decade” valued at $14 billion. If the federal government pushes for additional divestment, some companies could be “in a bind in terms of finding alternate sources of financing” as foreign investment law specialist Subrata Bhattacharjee told Bloomberg.  

The divestment order has been met with firm opposition from China in a statement last week that states “China will take necessary measures to safeguard the legitimate rights and interest of Chinese companies,” a China-based news source reports.  

The divestment order did not come with a plan to replace Chinese investment, assuming that there are other sources. A possible alternative has been reported by CBC, writing that “The United States military has been quietly soliciting applications for Canadian mining projects that want American public funding through a major national security initiative.” The article notes that this is because “Canada has, for decades, belonged to the U.S. military-industrial base and is every bit as entitled to the cash (sic. new US defence Production Act funds) as American mining projects.” 

Also of interest in the mining divesture announcement was the absence of mention of Chinese ownership stake in the Niobec mine in Saguenay, Quebec. The Niobec mine is one of the only sources of niobium, a longstanding top strategic mineral for the U.S.   

In a previous brief, we covered the implications of China pulling out of the Canadian critical minerals game, and what the industry and investors could be left with. The Toronto Star also covered whether or not this divestment order is actually in the best interest of Canada, read that here.  

Taiwan pushes for stronger ties with Canada

Taiwan’s representative in Canada is pushing to strengthen the bilateral trade relationship as supply chains are under pressure and geopolitical threats increase, a Toronto Star article notes.  The article continues that “In 2020, Canada imported more than $5 billion in products from Taiwan, and exported around $1.7 billion to Taiwan, which includes agricultural products, raw materials and cars from Canada, according to the Taipei Economic and Cultural Office.” There are concerns that Canada’s dependence on Taiwan’s semiconductor supply chains is risky as Chinese threats to close in on Taiwan continue. 

Indo-Pacific Strategy to (now) come early December

The long-awaited Indo-Pacific Strategy (IPS) originally slated for release after China’s National Congress could finally be made public, with Prime Minister Trudeau visiting Asia at the end of the month. Items in the pending strategy are likely to overlap with our southern neighbours —like limiting trade with China in areas where “state-backed companies are pursuing a global monopoly,” CBC reports. Deepening ties with democratic countries, like India, while discouraging further China entanglement will be a central theme of the strategy, according to CTV News and a recent speech from Foreign Affairs Minister Melanie Joly.  

See last month’s special edition brief where we asked experts what Western Canada needs out of the IPS. Keep an eye out for an upcoming CWF Policy Brief where we build on the expert responses from the last China Brief to present a deeper analysis of what western Canada, the region of the country most involved in trade with the Indo-Pacific, needs in an Canadian Indo-Pacific strategy. 

Emerging climate camps out of COP27

As the United Nations Climate Change Conference, COP 27, wraps up this week, we look at China’s involvement in the climate conversations. A piece published by the Atlantic Council outlines China’s unique positioning as it “straddles both sides of the energy transition.” China is the world’s largest producer of both coal and carbon emissions, but it is also a global leader in clean energy tech. The same piece predicts that during the COP27 sessions, two distinct and increasingly distant camps of the climate crisis will emerge: “one led by the West and another by China.”  

Western Canada products still head to China

Despite increasing geopolitical shifts, China is still importing a significant proportion of Western Canada’s products from our Western Canadian producers and exporters. According to Statistics Canada data, China has been the top destination for Canadian wheat this year. Plus, barley and peas were top exports to China in September 2022, accounting for 78 per cent (barley) and 67 per cent (peas) of total Canadian exports, Alberta Farmer Express reports.  

CWF’s Belt and Road and Five-Year Plan Monitor

Stay informed on recent Belt and Road Initiative and Five-year Plan developments of relevance to Western Canada’s relationship with China.  

Communist Party Congress and Canada Trade  

Last month China hosted the 20th Communist Party Congress where President Xi Jinping secured his third five-year term and outlined policy directions for the next five years. Reports from the meeting suggest that despite continued Zero-COVID policies and economic slowdowns in China, national security and military growth will take precedence over economic recovery and trade on the CCP agenda, a CBC article notes. In the same article, Canadian businesses — especially those in the meat, paper, and mining industries — are warned as experts say China’s economic performance drives many leading Canadian exports.  

In a Business in Vancouver piece, Hugh Stephens, distinguished fellow with the Asia Pacific Foundation, says that Canada needs to “learn to deal with a more assertive, more inward-looking, self-reliant China” and while China will continue to import Canadian resources for now, “that trade could be subjected to retaliation should other elements of the Canada-China relationship turn sour, as happened with Australia.” 

To be or not to be? The Belt and Road Initiative  

According to The Diplomat, the Belt and Road Initiative appeared only sparsely in the 20th Party Congress reports, “suggesting once again that [the BRI] is being relegated to a lower place in China’s policy hierarchy.”  

Earlier this month, External Affairs Minister S. Jaishankar of India said in a virtual meeting hosted by Chinese Premier Li Keqiang that India does not support the BRI as it does not respect international law and territorial integrity, India Express reports. A link in the BRI, the China- Pakistan Economic Corridor, bisects Indian territory, which India says Pakistan illegally occupies. 

In Pakistan, a country intricately involved in the BRI, Beijing’s COVID-19 restrictions put workers on lockdown and they have been banned from leaving the plant they work in without prior consent, ABC News reports. Pakistan’s army is providing enforcement support. 

Tanzania most recently reiterated its commitment to the BRI with a Presidential visit to China. Tanzania is a key gateway for China to access intra-Africa trade, The Diplomat reports. And in Latin America, China’s presence deepens as the number of state-funded BRI projects has hit a record high this past month, Forbes reports. The article notes that a $2.6 billion railroad project in Guadalajara, Mexico is part of the $5.3 billion China dished out to Latin America most recently.  

Other News

  • High-rise pig hotels? “The Ezhou” project that was announced in China two years ago (see previous brief) is now complete. It is a 26-story skyscraper for pigs, with air conditioning and maternity facilities. The 4-billion-yuan project is part of China’s effort to meet booming pork demand with limited farmland.  
  • For our foodies, Lao Gan Ma, also known as “China’s hottest woman,” is the creator of a crunchy chili sauce that has become a global condiment sensation. Read her story here and try to beat our hot sauce-loving Trade and Investment Centre director in locating a bottle in western Canada.  
  • The Vancouver Symphony Orchestra and Image China will partner to “showcas[e] ground breaking works by acclaimed Chinese and Canadian composers” on November 22 at the Orpheum Theater. The concert is “a symphonic celebration featuring east-west cultural exchange.” 
  • Calgary’s ginger beef and B.C’s Lower Mainland/Vancouver Island Halloween fireworks both represent Chinese immigrants’ influence on Western Canadian culture. Ginger beef was accidentally invented at Calgary’s Silver Inn (which recently closed its doors) and attracted locals to the Chinese restaurant. The fireworks emerged as a “mash-up” of British and Chinese traditions with British immigrants celebrating Guy Fawkes Day and Chinese immigrants importing fireworks for celebrations, like the Lunar Parade.  
  • CWF contributed to two recent Canadian conferences on Canada-China/Indo-Pacific. Hardtalk – Canada and the Asia Pacific Conference held at Carlton University on October 24th and the second annual East Asia Strategy Forum (EASF 2022) organized by the Asia Pacific Foundation of Canada (APF Canada) and The Institute for Peace & Diplomacy (IPD) on November 1 – 2 in Ottawa.  

– Taylor Blaisdell and Stephany Laverty, policy analysts

The China Brief is a compilation of stories and links related to China and its relationship with Canada’s West. The opinions expressed in the links are those of the articles’ authors and don’t necessarily reflect the views of the Canada West Foundation and our affiliates.