IN THIS EDITION: 5G networks in Canada, Canada’s international and domestic responses to Hong Kong, Spotlight on Canola, Barley and Pork.

5G Networks

Canada is not unfamiliar with being caught between China and the U.S. With the Meng Wanzhou case, it was predominantly U.S. pressure that resulted in the arrest of the Huawei official and the subsequent trade retaliation from China; China’s envoy to Canada has directly blamed the U.S. for causing trouble between China and Canada. With controversy around Huawei’s participation in 5G networks, Canada has yet again found itself subject to both U.S. and Chinese pressure and threats of retaliation.

The United States and Canadian tech giants Telus and Bell Media have announced that they will not develop their 5G networks with Huawei due to security concerns. SaskTel, which used Huawei entirely for its 4G network, has not determined whether or not it will use Huawei for its 5G. The Saskatchewan government will make the ultimate decision, pending a federal decision, on which company to use given the political significance and trade implications.

There are significant concerns that if Huawei is not allowed to work on 5G in the country, then the north and rural territories may be left further behind in terms of digital accessibility. Currently, 15% of Canadians do not have high-speed internet access. Huawei is the primary source for high-speed internet, 3G and 4G cellular links in the Yukon, North West Territories, and Nunavut as well as rural communities across the country.

Despite its commitment to bring high-speed internet to all Canadians by 2030 – including remote and rural communities where it is critical to improving agricultural performance – the Canadian federal government has yet to make a formal decision on whether Huawei is welcome to work on 5G networks for the country as a whole. Internationally, this decision will land Canada on either side of a predicted tech Cold War. The United States has made it clear that if Canada does side with Huawei, the U.S. will reassess the Canada-US intelligence relationship. If Huawei is not permitted to work on 5G, Canada should expect further scrutiny from China and experts are already predicting trade retaliation for the Telus and Bell decisions.

International Response to Hong Kong

Tensions between Canada and China continue to escalate over Chinese actions in Hong Kong, actions which currently face international scrutiny.

The chair of the federal Foreign Affairs Committee joined with counterparts in Australia, the UK, and New Zealand to ask the United Nations to establish a Special Envoy for Hong Kong. The chairs also sent messages to their respective Prime Ministers asking for the leaders to lend their support for the envoy push.

A spokesperson for the Chinese Embassy in Ottawa responded to the request with a reiteration of China’s previous statements that Hong Kong is a part of China and Canada is to stop intervening in Chinese internal affairs. China also called out double standards in the international response to China’s actions against Hong Kong protestors versus those of President Trump’s actions against Black Lives Matter Protestors in the United States.

Canada-Hong Kong Immigration

Canada has a history of both immigration to and emigration from Hong Kong. About 300,000 people left Hong Kong for Canada between the 1980s and 1990s. Following the turnover of Hong Kong from the British to China, the number of immigrants dropped from 241,095 in 1996 to 209,775 in 2011. By 2016, the number of immigrants increased to 215,750 and continued to trend upwards in 2017 and 2018, with experts identifying education and skilled labour demand as key drivers. With current tensions in Hong Kong, we may see immigration increase again with Canadian passport holders returning to Canada.

Chrystia Freeland, Deputy Prime Minister, has welcomed the 300,000 Canadian passport holders currently living in Hong Kong to return to Canada. Amid concerns that the Chinese government would prevent dual citizens from leaving Hong Kong, Avvy Go, the director of the Chinese and Southeast Asian Legal Clinic, made a series of recommendations for more timely repatriation.

Domestic Responses to Hong Kong

There are some domestic calls for the Canada-China Legislative Association to disband with those who want dissolution arguing that continued talks with China legitimize actions in Hong Kong. However, some members of the association have said that ending the association would stop one of the key communication channels between the two countries at a time when open communication channels are necessary.

John Higginbotham, former commissioner for Canada in Hong Kong and diplomat in Beijing, has argued for Canada to boycott the 2022 Beijing Winter Olympics. Mr. Higginbotham sees a boycott as a way for Canada to increase pressure on China for its actions in Hong Kong.

Spotlight: Canola, Barley and Pork

The United Arab Emirates, one of the other key exporters of canola seed and oil to China, has previously acted as a backdoor to Canadian canola for China. It appears that the UAE may be continuing, if not increasing, its role in supplying Canadian canola to China. From 2018 to the end of March 2019, the UAE imported 305,000 tonnes of canola. For the next year – March 31, 2019 to March 31, 2020 – the UAE imported 760,000 tonnes of canola.

Australia faces a similar situation following China’s tariff of 80% on Australian barley.  Chinese importers are looking at other markets with Argentina ramping up production in response, increasing competition for Canadian barley. Australian exporters are purchasing Argentinian barley to send to China instead of domestic barley to retain Chinese customers, particularly those looking for malt barley for beer production.

However, other agricultural sectors are facing increased growth. With the African swine fever outbreak in China, pork exporters to China, including Canada, are projected to have one to two years of strong exports to China. Pork imports were up 170% in the first four months of 2020 with the price in May up 81.7%.

Everything Else

• The key federal official in charge of the China file, Foreign Affairs Minister François Philippe-Champagne, has two mortgages totaling $1.2 million with the Bank of China. While the mortgages were disclosed with the Ethics Commissioner, there is risk that the Chinese government, who own the Bank of China, could use those loans as leverage.

• Andrew Scheer asked for an emergency meeting of the Canada-China relationship committee following reports of the Foreign Affairs Minister’s mortgage with the Bank of China.

• Former Ambassador to China, David Mulroney, issued a memo on his testimony to the Canada-China relationship committee, which was cancelled due to the pandemic.

• Former Canadian diplomat Colin Robertson has provided a list of recommendations to move Canadian-China relations forward. These recommendations cover a wide range of areas including sovereignty, diplomacy, trade, human rights, Hong Kong, Taiwan and re-engagement.

• With U.S. President Trump’s anti-China comments, Trudeau could be put in a difficult position if he attends the upcoming G7 summit in the United States. As the summit will be held in September, only two months before the U.S. election in November, President Trump may use the summit to gain necessary domestic political wins.

• The House of Commons Industry Committee held hearings on the Investment Canada Act and foreign take overs of Canadian business, particularly as COVID-19 has made companies critical or strategic for Canadian national security vulnerable. The primary concern for the committee is that state-owned businesses in countries like China may engage in takeovers to further their own intelligence and national security interests.

• Taiwan uses China’s blunders with COVID-19 and the Hong Kong protests as a way to gain diplomatic ties with other countries, including Canada. Taiwan is sending PPE to Canada, which will go to front-line health care workers and Indigenous communities and has offered itself as a transparent and democratic alternative to Chinese partnership.

– Stephany Laverty, policy analyst and Taylor Blaisdell, intern

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.