By John Gruetzner and Geoffrey Ziebart
The appointment of former McKinsey executive, Domonic Barton, as Canada’s new ambassador to China presents a new opportunity to reset bilateral relations. However, while Barton is well-positioned to further Canadian interests in the world’s second-largest economy, he also faces a range of formidable challenges.
Dominic Barton‘s appointment as Canada’s Ambassador to China, last month, creates an opportunity to improve the quality of Canada’s engagement with the world’s second-largest economy. His primary objectives should be to begin the long term process of improving the capacity for Canada’s civil society, government agencies and the private sector to engage with their Chinese counterparts.
Since 1970 Canada’s bilateral relationship with China has been on autopilot; effectively proceeding without adequate consideration of China’s rapidly evolving characteristics. It is, therefore, time for Canada to make a shift from a mostly passive, wishful thinking, mindset to a more activist approach.
Ambassador Barton – a former Global Managing Director at McKinsey – is well-positioned to develop the kind of data-driven framework necessary to gauge progress accurately.
Beginning with the commercial sphere, where Ambassador Barton – a former Global Managing Director at McKinsey – is well-positioned to develop the kind of data-driven framework necessary to gauge progress accurately. This should be the first step towards creating a national blueprint for engaging China and achieving Canada’s economic and security objectives.
To date, Canada’s China strategy has been conceptualized through the lens of high-level political science analysis and has overlooked the more tactical level expertise found, for instance, in business schools. And so, another critical step for Canada will be to engage more technical specialists in the research process. More granular-level information, coupled with empirical research from in-country experts, will inform public and/or private sector strategy more fully.
This reform can be achieved simply by amending Treasury Board guidelines, so research on China – indeed, on all global markets – includes local input from Canadian missions and other local experts.
Further, a range of other policy changes is also worth considering, including:
- pushing Canadian commercial banks to support Canadian companies in China further;
- broadening the scope of Export Development Corporation (EDC) products for China; and
- determining whether it would be valuable for the Business Development Bank of Canada (BDC) to establish regional offices that can service Canadian exporters in China and other international markets.
And given that Canada is rapidly moving forward as an export-oriented economy, particularly in the field of fashion, sporting goods and luxury products, Ottawa might also explore creative initiatives such as a private-public partnership to establish Canada-centric solutions to sell Canada’s growing capacity in the luxury, sporting and consumer goods sectors.
As a non-career diplomat, Barton may bring a fresh approach to the job. Ideally, this will mean a willingness to work with a broad spectrum of corporate, government and civil society stakeholders. Such an approach must still respect the role of the Chinese Ministry of Foreign Affairs (MFA); mitigate the impact of competing press releases between both MFA and Global Affairs Canada; but, most importantly, engage directly with industry stakeholders in China that share an interest in successful cooperation with Canada.
A broader approach should also encourage Canadian executives to focus on their companies’ profitable growth by moving beyond government protocol and, instead, viewing the China market as a large body of customers that need to be convinced on the fundamentals of price, quality and service.
The focus on protocol may have been a successful “Team Canada” strategy in the mid-1990s, but it is no longer anywhere near as relevant today. In the meantime, Chinese companies have grown tremendously and are now competing fiercely around the globe. For Canadian companies, this presents both a challenge to meet and an opportunity to grasp. But since Federal and Provincial governments still provide a significant proportion of Canada’s human resources in China, though they may provide valuable initial bridges to the market, it is time for many businesses to move from the infrequent trade mission stage to operating, full-time, on the ground in China.
The focus on protocol may have been a successful “Team Canada” strategy in the mid-1990s, but it is no longer anywhere near as relevant today.
Beyond business, civil society engagement might be strengthened by providing funds to qualified NGOs, either in China or Canada, that work in politically non-sensitive areas. At the same time, the viability of an Open Canada Grant Program, funded via the International Development Research Centre (IDRC), or other NGO channels that improve civil society and increase political pluralism should be reconsidered. These channels are more responsive, flexible and less politically sensitive than using government channels.
There is at present, however, a significant impediment to further development of the Canada-China relationship: the case of Meng Wanzhou, the CFO of Huawei, one of the world’s top telecoms equipment firms, who was detained by Canadian authorities pursuant to an extradition request from the US. Ambassador Barton will have his work cut out here, as he can only emphasize to Chinese policymakers that Canada’s extradition treaties are administered through an independent judicial system, that was designed to be immune to outside pressure.
a significant impediment to further development of the Canada-China relationship: the case of Meng Wanzhou, the CFO of Huawei, one of the world’s top telecoms equipment firms, who was detained by Canadian authorities pursuant to an extradition request from the US.
Similarly, concerning the rollout of Canada’s 5G networks, he can only diplomatically reiterate that various national security considerations will inform the extent of Huawei’s participation therein. At the same time, however, as he weighs the negative impact of this case on his CFO, his company, and China, hopefully, Huawei CEO Ren Zhengfei will encourage China’s government to reduce diplomatic tensions.
China already understands the value that extradition can bring to global justice, as well as the gains it derives it is own anti-corruption efforts by supporting the integrity of the global banking transfer system (Meng has been accused of bank fraud). So hopefully it will come to be realized that an improved relationship with Canada – rather than ongoing tension – will deliver the more significant benefits to the Chinese people.
If Canada is to stand by a multilateral rules-based order, it is obligated to play zone defence with others that share this commitment. Canada has learned over the years to push back on American exceptionalism. It can and must learn over time how successfully to push back on Chinese exceptionalism as well.
Canada and China have a moral obligation to overcome the “freeze” recently articulated by China’s previous Ambassador and work on important issues of common interest. McKinsey, in a recent report, points out that China is responsible for 28% of global carbon emissions. Canada has many leading technology companies in this space that can scale up to be significant players in China if the right commercial strategy is undertaken.
Now that China’s Vice Premier Hu has accepted the threat that Asian Swine Fever presents, there is a potential role for Canada to assist in resolving the epidemic, especially given that Canada is one of the world’s top three pork producers. China plans to bury nuclear waste in Gansu; Ontario Power Generation has the expertise to assist in this endeavour. These are merely some initial steps in rebuilding the relationship. Beyond this are many broader issues for cooperation including climate change; global debt levels; reform of the World Trade Organization and assisting China so that its global procurement of energy, minerals and commodities adheres to the best environmental practices.
Canada and China have recently both appointed new Ambassadors. For the sake of their respective citizens, we hope that both sides can find a constructive path forward. For his part, Ambassador Barton has some heavy lifting to do, both in China and in Canada, to bring about those changes necessary for success.
Geoffrey Ziebart is Chairman of the Ottawa-based China Policy Centre. He previously served in the Canadian Armed Forces, and has studied and worked in China for 25 years, the last 10 as Country President for a Fortune 1000 industrial manufacturer
John Gruetzner is one of the 24 founders of the China Policy Centre. He has lived and worked in China for over 35 years and serves on the Board of a number of start-up companies.