IN THIS EDITION: gearing up for Meng Wanzhou’s trial; a new parliamentary committee on Canada-China relations; and will there be Canadian gains from the US-China trade truce?
“Here’s the problem: Whatever China commits to buying from the U.S. will inevitably come at the expense of other exporting countries. In farm products, Canada is among the countries most at risk of losing market share” – Barrie McKenna, the Globe and Mail
Meng Wanzhou’s Trial
• The extradition hearing of Meng Wanzhou, CFO of Chinese telecom Huawei, is set to start in Vancouver on January 20. Meng’s arrest in December 2018 triggered a massive fallout in Canada-China relations.
• Business in Vancouver named Meng “newsmaker of the year” for the impact her arrest has had on trade with China, diplomatic relations, and the seemingly arbitrary arrests and detainments of Canadian citizens.
• Kai Valdez Bettcher at the Asia Pacific Foundation documented how this has impacted Canadian exports to China, and investments by Canadian and Chinese businesses into the other country. The main takeaways are an overall drop in Canadian exports to China (a $1.5 billion drop compared to 2018) and a jaw dropping decline in Chinese investment in Canada (from $3.6 billion Jan-Oct 2018, to $351 million Jan-Oct 2019).
• This first stage of the hearing will only take a maximum of four days – so if there is more fallout in the China-Canada relationship because of this, we’ll soon find out.
A new parliamentary committee on Canada-China relations
• In December the House of Commons voted to appoint a special committee to review the Canada-China relationship. This was a conservative motion – all parties except the ruling Liberal Party voted in favour. This has been interpreted as a criticism of the Liberal government’s approach to the relationship with China.
• This committee will review all aspects of the Canada-China relationship, and will be empowered to call Foreign Affairs Minister Francois-Philippe Champagne, Public Safety Minister Bill Blair, and Canada’s ambassador to China Dominic Barton as witnesses “as the committee sees fit.”
Will Canada gain from the US-China trade deal? Probably not
• Many Canadian business owners are looking eagerly at whether the US-China trade deal will mean any improvements in trade and investment, but Bank of Canada governor Stephen Poloz says that it is too early to tell. He says that it’s not clear whether any other tariffs on China will be rolled back, and there are also concerns that the US could turn its attentions to the European Union. Either way, we’re still playing a “wait and see” game.
• Barrie McKenna goes farther in the Globe and Mail, saying that the agreement is “bad news for Canada and we can’t do a thing about it. It’s also ominous for global trade more broadly.” He predicts that some of the Canadian exports that could be hurt include canola oil, soybeans, frozen pork, beef, lentils, wheat, beans, seafood, and coal.
Pork exporters gearing up to sell more to China in 2020
• The largest Canadian exporter of pork to China is expecting shipments to jump as much as 60 per cent in 2020. This comes after African Swine Fever has wiped out roughly half of China’s hog population (in September, losses were estimated at 100 million pigs).
• Last year was on track to be a record year for pork exports – until meat sales to China were suspended for four months. (For more of that see this China Brief).
• China consumes 50 million tonnes of pork annually – and is believed to be short between 20 and 30 million tonnes.
• A sign of how significant the shortage is: some banks in China are now giving out small amounts of pork to people who sign up as a customer.
A rare earths update: why Canada is unlikely to be competitive with China
• China’s domination of the rare earth elements industry has prompted business in Canada and the US to try to build their rare earth elements capacity. However, a rare earth expert has thrown cold water on this, saying that Canada is “decades” behind China here.
• For more in-depth coverage of China’s rare earth elements industry and Canada’s response to it, see this China Brief.
And, in case you missed it:
• China is close to overtaking the US as Canada’s largest market for lobster
• An op-ed in the Globe and Mail argues that Canada should re-up its efforts to have other countries help in its response to China.
• In an effort to jumpstart its economy, China is releasing $150 billion into its financial system.
• This CBC analysis questions if the question of allowing Huawei to be part of Canada’s 5G network can be separated from the issue of the detention of Michael Kovrig and Michael Spavor in China.
– Sarah Pittman, policy analyst
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.