IN THIS EDITION: Pressure mounts to exchange Meng for the two Michaels, Canada seen as soft on China, trade tensions affect new industries.

Michaels for Meng – Not Likely

Tensions flared over China’s move to charge Michael Kovrig and Michael Spavor with espionage related crimes. The charges came in a move that many see as retaliatory and predictable following the Meng Wanzhou decision (detailed in a previous China Brief). China charged Kovrig with spying on state secrets and intelligence for other countries abroad and Spavor with spying on national secrets and providing those secrets outside China. The case has highlighted, for Canada, the measures that China is willing to take in response to diplomatic events that are not in China’s favor.

China detained the Michaels in 2018 in the days after Meng Wanzhou was arrested in Canada to pressure Canada for release of the Huawei executive. The prime minister condemned the charges this week, saying that the detainment of the Canadians was a “political decision” which Canada “deplores.” China refused to acknowledge a link between the two cases and denounced the Prime Minister’s “irresponsible remarks.”

Chinese officials have supported the calls from former Canadian officials, that the Michaels could be returned if Canada drops the extradition case. Kovrig’s wife joined those calls but asked the Chinese government to reconsider its detention of the two Michaels; she released letters detailing her husband’s experience in Chinese custody. A friend of Spavor has also voiced his concerns and asked for Spavor to be released.

The Chinese Embassy in Ottawa responded to those who see the arrests of the two Michaels as politically motivated. The embassy stated that the arrests were grounded in Chinese law and based on “solid and sufficient” evidence. The statement acknowledged that Chinese officials supported the exchange in remarks but refuted any attempts to make it appear as though these calls came directly from officials, saying such reports were misleading and a violation of professional ethics.

The prime minister has dismissed efforts to end extradition proceedings and engage in an exchange as it would open the door to China and other countries to use Canadian political prisoners as bargaining chips.

The Michaels/Wanzhou issue has broader implications for the international community as well, particularly where tensions exist with China, such as those with the United States and Australia. There is concern that nationals from other countries could be detained in China if their home country takes measures counter to Chinese interests. U.S. officials issued their own statements of condemnation for Chinese charges against the Michaels and added pressure for their release.

Canada too soft?

In the Chinese Ambassador to Canada’s reflections on 50 years of Canadian-China diplomatic relations, he highlighted third party actors as the biggest source of interference in the relationship. The ambassador specifically points to the United States and the administration’s America First policies, pulling out of international treaties, and the extradition request for Meng Wanzhou. The ambassador also refers to Canada’s previous stances on the Iraq War, Cuba, COVID-19, and even Canada’s push for relations with China, as examples of Canada’s previous independence in the face of U.S. pressure.

There are also domestic concerns that Canada is too soft on China. Canada-China tensions, and the prime minister’s response to those tensions, could have been a factor in Canada’s loss for a UN Security Council Seat. Some have argued that the Canadian government is too soft when it comes to Canada-Chinese issues citing Canada’s lack of response on the 5G question, refusal to use stronger language in regards to the two Michaels and  unclear foreign policy on China and other issues.

The Canadian Security Intelligence Service (CSIS) has highlighted Canada’s permissiveness as a key factor in why China has targeted influence in the country over others. In its report, the agency identified China as the number one threat to Canada over Russia in terms of interference. The agency reports that China has engaged a number of Canadian business leaders and political figures with inducements which result in those individuals publicly supporting Chinese positions within Canada.

Not all Canadian officials shy away from strong language when it comes to China. A group of senators, comprised of both Conservative and Liberal appointees, have called for the Canadian government to implement Magnitsky Act-style sanctions on Chinese officials.

The senators call for the sanctions in response to Chinese detention of Uighur Muslims, actions in Hong Kong and Tibet, and the detention of the two Michaels. The Act allows for governments to apply sanctions on any officials or foreign nationals engaged in human rights abuses. The sanctions emerged following the actions of Russian officials against Sergei Magnitsky, who was tortured and died in a Russian jail while investigating fraud within the country.

Trade Affected for Canola, Lobster and Logs

Trade tensions with China continue to escalate as Chinese importers suspect contamination of Canadian lobster and wood. Chinese importers demanded that Canadian exporters sign a declaration to guarantee the lobster is COVID-19 free and that exporters will assume responsibility for any future detection. While Nova Scotia exporters are confident that their lobsters are COVID-19 free, they are hesitant to get involved in any legal liability with China. If Canada wants to continue lobster exportation, Chinese officials say they must abide by these regulations.

China says they have discovered pests in imported logs from Canada. Because pests in logs are nothing new and fumigation upon import in China is a common protocol, the “pest issue” appears to be more of a political move according to Kevin Mason, managing director of Vancouver-based ERA Forest Products Research.

As diplomatic tensions with China rise, Canadian canola prices and exports drop. In the current marketing year, China has imported 1.16 million tonnes of Canola, compared to the 2.19 million they purchased at the same point in 2018-19. China is now directing its purchasing power elsewhere, as 10 cargoes of soybeans were purchased from Brazil the same day the Meng Wanzhou hearing decision was released.

Despite these trade and diplomatic tensions, overall trade between Canada and China remains strong and Chinese media is even pushing a Canada-China trade agreement.

Anti-Asian Racism continues

As provinces begin reopening amidst the COVID-19 pandemic, anti-Asian racism continues to sweep across Canada. Angus Reid and the University of Alberta’s most recent online survey reveals how widespread  anti-Asian racism currently is in Canada. Between June 15 and 18, 516 Canadians of Chinese descent were asked about their experiences with racism in recent months.

The poll found, that at this moment:

• 50% of Chinese-Canadians have been called names or insults.

• 43% have faced threats or intimidation.

• 8% have been attacked or physically harmed.

• 30% have been habitually exposed to racists graffiti or social media posts.

• 6 in 10 say they have altered their daily routines to avoid any unpleasant encounters.

Three-week old racist graffiti was found outside of a Chinese restaurant in Calgary, which was recently the subject of an alleged arson attack and theft. The investigation is underway, and it is not clear if the previous graffiti has any link to the recent fire.

Everything Else

• Federal Innovation Minister Navdeep Bains says that China continues to pressure Canada to use Huawei for its 5G network. The federal government has still not formally announced a decision either way.

• Jack Ma is no longer China’s richest person, the title which now belongs to Pony Ma from Tencent Holding. Tencent Holdings had a $40 billion increase this week, pushing Pony Ma’s worth to $50 billion over Jack Ma’s $48 billion.

• CN looks to grow in Asia to fuel revitalization of its eastern Canadian network and diversify from Chinese sites. The expansion would create more container sites in Montreal, Quebec City and Halifax to handle increased shipment through the Suez Canal.

– Stephany Laverty, policy analyst and Taylor Blaisdell, research 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.