It has been a pleasure writing the brief these past ten months. Happy holidays from all of us at the China Brief and the Canada West Foundation. Best wishes for 2021 and an early happy Year of the Ox!
– Stephany Laverty, policy analyst

IN THIS EDITION: U.S. transition and Canada-China relations, China projected to hold top spot for U.S. agriculture exports, Reopening China to Richardson and Viterra

U.S. transition and impacts on Canada-China relations

After months of speculation on how a Biden administration would approach China trade relations, observers started to get some answers. In a recent New York Times interview, Biden said he would not remove tariffs on China until the administration consults with allies in Asia and Europe to determine a path forward. Biden also said the administration would not immediately rescind the U.S.-China Phase One trade deal and would conduct a comprehensive review of the agreement.  

In terms of Biden impacts on Canada-China relations, the South Morning China Post provided observations based on Biden’s comments. If Biden joins with other allies to form a multilateral approach to China, Canada will likely join. David Mulroney, former Ambassador to China under the Harper government, sees Canada taking a tag along rather than leadership role in such an approach. His reasoning? Australia and other allies have firmer stances in terms of China. Charles Burton, a former counsellor at the Canadian embassy in Beijing and a senior fellow at the Macdonald-Laurier Institute, also sees Canada joining such an initiative and that it could force Canada to clarify its response to China. This approach could tie Canada’s hands on China-related issues where multilateral decisions have determined the path forward. 

In support of a multilateral approach, the Western Producer editorial team published a recent op-ed. The team argues that Canada needs to work with other Chinese trade allies as “convincing a dragon to change its behaviour will require more than a beaver waving a stick.” 

China projected to hold top spot for U.S. agriculture exports

Biden may not want to end the Phase One trade deal given the USDA projects China to take the top spot as recipient of U.S. agricultural exports for 2021. If this projection holds, it would be the first time since 2017 that China held the number one position and would push Canada second. The Phase One trade deal, China’s rapid pandemic recovery, and increased prices and demand for soybean and corn are behind the record projection. Overall, the U.S. is expected to export $152 billion over the 2021 fiscal year with China taking $27 billion worth of goods.  

Reopening China to Richardson and Viterra

In comments during Canola Week, Kathleen Donohue, Director General, Market Access Secretariat at Agriculture and Agri-Food Canada, said that reopening China to canola from Richardson and Viterra is a priority. Donohue said that the Government of Canada provided a report to the Chinese government to support reopening and the Chinese government is reviewing the report. 

Pork exports to China expected to drop

With China’s temporary COVID-19 import restrictions on 10 pork processors, which make up two thirds of Canadian pork processing, expect a short-term drop in exports to China. Despite most restrictions needing six to eight weeks to lift, some processors have passed that timeline and have not seen any movement in terms of restrictions. Currently, 10 Canadian pork processors are under restrictions. See the previous China Brief for more on Chinese restrictions and the crunch they are causing for both importers and exporters. 

COVID-19 outbreak at B.C. mink farm

Could the mink industry face China import restrictions like that of pork or beef? A mink farm in B.C. Fraser Valley is under order to restrict movement of its animals, products and goods after eight people with ties to the farm tested positive for COVID-19. The Canadian industry hoped to make inroads as other countries face COVID-19 outbreaks at mink farms. Denmark, the top global exporter for mink, culled between 15 to 17 million animals. With Asian markets, including China, the target market this time of year and sales already down due to pandemic pressures, there are concerns the industry could be eliminated in Canada if widespread outbreaks occur.  

Optimism for a Meng Wanzhou-two Michaels deal

Amid reports that the U.S. Department of Justice was in talks for a deferred prosecution agreement which would allow Meng Wanzhou to return to China, there was optimism the two Michaels could return home as their families recently marked two years since their detention. However, former Trump administration National Security Advisor John Bolton said that he was skeptical and would wait for additional information. Canadian Minister of Foreign Affairs François-Philippe Champagne said that there has been progress made in the two Michael’s case but would not comment on any ongoing legal matters other than to say the department follows the Meng Wanzhou trial closely. 

There was recent confusion as a Chinese Foreign Ministry spokesperson said that a Chinese court had indicted and tried the two Michaels. However, the Canadian Ministry of Foreign Affairs has contacted the Chinese ministry and received clarification that was “an inaccurate characterization.” 

Everything Else

  • Leger’s latest online survey for B.C. residents, conducted on behalf of Postmedia, focuses on Canada’s relationship with China and how to move forward. Of those surveyed, 80 per cent said they “think it important for Canada to further diversify its trade partnerships, given the impact that Meng’s detention has had on trade,” and 77 per cent said that “they are concerned with respect to Canada’s relationship with China.” 
  • The U.K.’s Daily Mail reports high level talks between the Five Eye nations – Australia, U.K., Canada, U.S. and New Zealand – to discuss how to respond to China. Early options include sanctions from all five countries or for Australia to impose tariffs and for the others to support. There is also discussion of Japan joining the alliance to make Six Eyes.
  • Canadian Minister of Defence Harjit Sajjan confirmed that Canada is no longer taking part in an exchange and training program between the Canadian Forces and China’s People Liberation Army. The program drew attention as documents revealed the 2019 winter training exercises were cancelled. 
  • Global Affairs Canada, documents show, did not support cancellation as China could have seen the move as retaliatory for Meng Wanzhou and caused issues for the two Michaels. The U.S. Pentagon did express concern over knowledge transfer to the Chinese forces. 

    – Stephany Laverty, 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.