China Brief: China, the Indo-Pacific and Canada’s West
Issue 101 | March 2024

In this issue: China’s new food security law, plus the Canada-China-fentanyl connection

Food security takes centre stage

In December, China published its National Food Security Law which firmly places food security as a national imperative, instructing multiple levels of government to incorporate food security into economic and social development plans. The law includes chapters dedicated to almost all facets of the agricultural sector, including land use, grain production, reserves, circulation, processing, grain emergencies, conservation, as well as administration and legal matters.

As a single party state, the Chinese government takes food security and the agricultural economy seriously. A food shortage crisis would put significant stress on the Party’s governance. Given the spotlight Russia’s invasion of Ukraine shone on world food supplies and broader geopolitical tensions, the government wants to ensure it is sending signals to the people and cadres that this a top priority. But it also reflects the Party’s penchant for control and President Xi Jinping’s own personal program to seek self-sufficiency across the board.

But engineering catch-up industrial expansion is easier than coaxing additional yields out of a dwindling agricultural land base. This means international trade will remain vital to food security for China. And while that creates opportunities for Western Canada, these aren’t guaranteed. Some key Canadian ag exports have seen their market share drop as the Chinese turned geopolitical lemons into lemonade by greatly increasing their imports of Russian peas, all the while playing both sides by offering up new phytosanitary protocols to pave the way for new market access for Ukrainian exports.

China may also choose to support its food security needs through increased outbound investment in farmland. Indeed, it is happening in America though it’s not clear to what extent or if it should be a concern. But this isn’t stopping U. S.  state governments and think tanks from piling on by designing measures to address this new ag flashpoint. One thing is certain, should any of these invested farmlands  occur near military facilities, it will catch the attention of the U.S. federal government as well. All this current attention on Chinese farmland investment south of the border, may nudge western Canadians to recall that this issue popped up a decade ago. While the media focus on China was far less negative than it is today, that didn’t prevent public attention. Prairie governments responded by tightening up rules around foreign ownership. Alberta, Saskatchewan and Manitoba restrict ownership of more than a few acres of agricultural land to Canadian citizens, permanent residents and Canadian-owned organizations.

Trade the West doesn’t want – the Canada-China-fentanyl connection

Fentanyl has been a story on its own in Canada, but it also has a western-Indo-Pacific nexus. There are reports, including this one by CBC, of Vancouver emerging as a fentanyl manufacturing and distribution point for North America and Australia. The U.S. Congressional Research Service has an excellent short report released this month on the trade triangle involving China, Mexico and Canada with the U.S. in the middle.

In response to the rising crisis, Voice of America reports that U.S. Homeland Security Secretary Alejandro Mayorkas met with Chinese Public Security Minister Wang Xiaohong in Vienna this month. Talks are “giving Washington reason to hope that current talks may eventually help stem the flow of drugs such as fentanyl into the United States.” Similar optimism was voiced in private conversations with a former senior Mexican government official based in Beijing.

While Mexico and the U.S. announced recent agreements with China to cooperate to stem the flow of fentanyl and precursor chemicals used to manufacture it, we have been unable to find any reference to similar talks, let alone agreement, between Canada and China.

Late last year, our North America brief noted that the U.S. and Mexican presidents met formally with Chinese leader Xi at the APEC summit in San Francisco to discuss fentanyl among other topics and that PM Trudeau did not, having only a passing exchange of pleasantries. We were worried about that and flagged it as something to watch.

Since then, there has been extensive reporting, both abroad and in Canada, of a fentanyl and precursor chemicals connection from China to Canada. A National Post piece by a former RCMP officer observes that “every time Canadians talk about the opioid crisis, they focus on treating the effect of the problem, not the cause. Instead of debating the merits of “safe supply,” we should demand a crackdown on the flow of opioids and their components into our country.”

We also need to be concerned about the flow out of Canada. The Americans announced a crackdown last fall that resulted in sanctions against 14 firms from CHINA AND CANADA  – highlighting Canada’s rising role as a source country for fentanyl produced with inputs from China. The Americans are increasingly noticing it as a threat to the U.S., which adds an element of concern in Canada where access to the U.S. market is an ever-present apprehension. If U.S. and Mexican actions to stem the flow of the drug and precursor chemicals is any indication, any crackdown on fentanyl in Canada will also involve forging agreements to work with the Chinese government. This is a critical area where Canada must engage China immediately to build a cooperative bridge.

In case you missed it!

  • The public inquiry into foreign interference has officially started. Our friends at the Asia Pacific Foundation have put together this helpful brief for anyone looking for further detail on the timelines and process.
  • While the foreign interference inquiry was instigated by concerns about China’s role, the PM’s September 2023 allegations brought India into the spotlight and the commission has confirmed India will be included in the scope. This piece outlines the latest.
  • As Saskatchewan Trade Minister Jeremy Harrison highlighted last issue, his province won’t stand idly by when Saskatchewan’s economic interests are threatened. Premier Moe is pushing provincial diplomacy this week with his visit to India and was even welcomed by Foreign Minister S. Jaishankar!
  • Lastly, Minister Joly met with PRC Foreign Minister Wang Yi on the sidelines of the Munich Security conference, with the latter suggesting that Canada is “not a rival.” This stems from their call earlier this year, with both talks signaling some potential for improved ties, a topic that we’ll assess in our next issue!

China Brief
Jeff Mahon, Executive in Residence, Trade and Trade Infrastructure
Carlo Dade, Director, Trade and Trade Infrastructure

The China Brief is a compilation of stories and links related to China, the Indo-Pacific and relationships 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.

Photo: iStock