Key Takeaways
- Canadian Prime Minister Mark Carney is visiting China to improve relations and diversify the Canadian economy
- The visit comes at a pivotal moment in relations between the two countries, following a deep freeze after the arrest of a Huawei official in 2018
- Carney aims to reduce Canada’s dependence on the US and find new markets and investors for the economy
- The trip may lead to specific economic deals, such as selling Canadian energy and agriculture products to China
- Canada faces a challenging balancing act with China, particularly on sensitive issues like Taiwan and the South China Sea
Introduction to the Visit
Canadian Prime Minister Mark Carney has arrived in China for a visit that comes at a crucial time in relations between the two countries. As the first Canadian leader to visit China since 2017, Carney is set to meet with Chinese President Xi Jinping and Chinese Premier Li Qiang. The visit marks a significant moment in the relationship between Canada and China, which has been strained since the arrest of Huawei official Meng Wanzhou in 2018. China retaliated against the arrest by detaining two Canadians, and relations have continued to face challenges, including tariffs and accusations of political interference.
Background of the Strained Relationship
The strained relationship between Canada and China began in December 2018, when Canadian authorities arrested Meng Wanzhou, a key official of Chinese telecommunications firm Huawei, as she was transitioning through the Vancouver international airport. The arrest was carried out at the request of authorities in the United States, and China responded by detaining two Canadians. Since then, relations between the two countries have continued to deteriorate, with Canada imposing tariffs on Chinese electric vehicles and China retaliating with tariffs on Canadian agricultural goods, including canola. Additionally, Ottawa has accused China of political interference, further straining the relationship.
Carney’s Goals for the Visit
Carney’s visit to China is seen as a significant step towards improving relations between the two countries. According to Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada, the visit "marks a recalibration and change in tone and signals Canada’s desire to improve relations." Carney is keen to diversify the Canadian economy and reduce its dependence on the US, which is the destination for nearly 80 percent of Canadian exports. The Canadian leader has traveled extensively to find new markets and investors for the economy, including a recent visit to the European Union and the Gulf. Carney has stated that he wants to double Canada’s non-US trade in the next decade, and the visit to China is a key step towards achieving this goal.
Economic Implications of the Visit
The visit may lead to specific economic deals, such as selling Canadian energy and agriculture products to China. However, Nadjibulla does not expect to see the full lifting of tariffs between the two sides. The visit comes as a review of the trade agreement between the US, Mexico, and Canada is underway. The USMCA has allowed Canadian and Mexican goods that are covered under the agreement to enter the US tariff-free, but the agreement is under threat due to comments from US President Donald Trump. If an agreement to extend or modify the USMCA is not reached, it will enter a period of mandatory annual reviews until 2036, after which it would expire, resulting in a "prolonged period of trade policy uncertainty."
China’s Interests in the Visit
The visit is not only significant for Canada but also for China. Beijing is looking for new export markets and the removal of trade restrictions, such as the electric vehicle tariff. China is also seeking a "political and narrative win" from the visit, which would allow it to portray Canada as trying to correct past mistakes. China has often criticized Canada for following the US too closely, and the visit may be seen as an opportunity for Canada to demonstrate its independence. However, this may come at a cost, as Canada will face pressure from China on sensitive issues like Taiwan and the South China Sea.
Challenges Ahead for Canada
Canada faces a challenging balancing act with China, particularly on sensitive issues like Taiwan and the South China Sea. Earlier this week, two Canadian MPs from Carney’s Liberal Party wrapped up a visit to self-governing Taiwan ahead of schedule on the advice of the government. The lawmakers cited the need to avoid "confusion" in Canada’s foreign policy ahead of Carney’s visit. Nadjibulla described this development as "worrying," adding that Canada will face a difficult balancing act with China. As Canada seeks to improve relations with China, it will need to navigate these sensitive issues carefully to avoid jeopardizing its relationships with both China and the US.
