What Canada's Indo-Pacific Strategy has to say on China
Lets break down the strat, line by line.
Happy Indo-Pacific Strategy Day Canada!
Here’s what the Indo-Pacific Strategy has to say about China. For clarity,
Text like this is from the official Indo-Pacific Strategy
Text like this is our commentary.
Canada’s China Strategy
This whole section was added between the leaked version in September and today, and could very well have been a separate policy document that would have waited for release, but due to political pressure was added in here.
Canada’s evolving approach to China is a critical part of the Indo-Pacific Strategy.
China is an increasingly disruptive global power. Key regional actors have complex and deeply intertwined relationships with China. Canada’s Indo-Pacific Strategy is informed by its clear-eyed understanding of this global China, and Canada’s approach is aligned with those of our partners in the region and around the world.
This is basically saying “even if you don’t trade with China, you’re trading with nations who trade principally with China”. There is not a lot of the Indo-Pacific that doesn’t revolve around China.
China’s rise, enabled by the same international rules and norms that it now increasingly disregards, has had an enormous impact on the Indo-Pacific, and it has ambitions to become the leading power in the region. China is making large-scale investments to establish its economic influence, diplomatic impact, offensive military capabilities and advanced technologies. China is looking to shape the international order into a more permissive environment for interests and values that increasingly depart from ours.
This graph tells the story of this paragraph; increasingly, the same international rules-based order that Canada talks about incessantly is run by and for the benefit of China’s state interests.
This can be seen in China’s disregard for UN rulings on disputes in the South China Sea, and its actions to further militarize that region and challenge navigation and overflight rights. Canada has experienced, like others, the impact of coercive diplomacy and non-market trade practices, such as forced labour.
What has the impact of forced labour been on Canada? Are we claiming here that we have a competitive industry to either solar or textiles, the two big Xinjiang industries? hmm.
The global community continues to see the effects of lending practices that diverge from international standards and create risks for developing economies and their governance. We see China’s increasing reluctance to comply with the mandates of UN institutions, such as its efforts to block the UN High Commissioner for Human Rights’ report on the situation of Uyghurs in Xinjiang, China, from consideration by the UN Human Rights Council. Canada has been compelled to adjust warnings to Canadians travelling to China, as well as to the business community, to account for the growing risk of arbitrary application of Chinese laws. In short, behaviours and policies that erode the existing rules-based international order undermine Canadian interests, whether they come from countries that are big or small—but they are especially challenging when pursued by rising powers with divergent national values.
The callout here on lending practices is related to China’s lending in Africa, which is “yesterday’s battle”. There was a moment in 2018 where it seemed that the amount of lending would spiral out of control, but poor ROI on a lot of that money has caused Beijing to pivot.
Calling out China’s efforts to try to block the UN High Commissioner’s report is odd, in that they were unsuccessful at preventing its release. Using “rising powers with divergent national values” is a strange double-speak, because we already know we’re talking about China.
At the same time, China’s sheer size and influence makes cooperation necessary to address some of the world’s existential pressures, such as climate change and biodiversity loss, global health and nuclear proliferation. And China’s economy offers significant opportunities for Canadian exporters.
This is a nice inclusion suggesting that there are many areas of mutual cooperation left to us.
Calling out the opportunity in China as ‘significant’ for Canadian exporters is a funny underestimation of the current situation. The volume of trade in the Indo-Pacific that relates to China makes it by far the most important country for Canada’s economy in the region. In fact, if you had to choose for the next 10 years on a purely economic basis between keeping China and keeping the rest of Asia, most experts would tell you that the economically correct answer is to keep China.
Canada will, at all times, unapologetically defend our national interest, be it with regard to the global rules that govern global trade, international human rights or navigation and overflight rights. Our approach to China is shaped by a realistic and clear-eyed assessment of today’s China.
In areas of profound disagreement, we will challenge China, including when it engages in coercive behaviour—economic or otherwise—ignores human rights obligations or undermines our national security interests and those of partners in the region. We must all abide by international rules. We will work together with regional partners. We will cooperate with China to find solutions to global issues such as climate change, biodiversity loss, global health and nuclear proliferation.
“We won’t apologize while defending our national interests”- literal cliché of Canadian foreign policy.
Canada’s Indo-Pacific Strategy
Our approach to China, which is inseparable from our broader Indo-Pacific Strategy, operates across domestic, bilateral, regional and multilateral spheres:
• At the domestic level, Canada will continue to strengthen the defence of our Canadian infrastructure, democracy and Canadian citizens against foreign interference. This includes reviewing, modernizing and adding new provisions to the Investment Canada Act that protect our national interests,
the “Investment Canada Act” sounds like something it’s not. The 2009 law that seeks "provide for the review of investments in Canada by non-Canadians that could be injurious to national security." Basically, a way to regulate foreign direct investment.
as well as acting decisively when investments from state-owned enterprises and other foreign entities threaten our national security, including our critical minerals supply chains;
This is a big wake-up call to the mining industry, saying basically the Good Times are Over when it comes to Chinese capital funding Canadian businesses to expand their reach into Canadian companies.
further protecting Canadian intellectual property and research; pushing back against any form of foreign interference on Canadian soil; and strengthening our cyber security systems.
This is a direct confrontation of the election interference stories of the past 4 weeks.
At the same time, we are committing significant resources to enhance Canadian competencies on China across and beyond government to ensure that we are better able to understand, assess and respond to the growing impact of China in the region and beyond.
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• At the bilateral level, Canada will pursue dialogue with China to advance Canada’s national interests while remaining true to our values, all the while focusing relentlessly on Canadian priorities.
So we’re going to start talking to China more.
Canada is reviewing all mechanisms and structures, such as Memorandums of Understanding (MOUs) and Dialogues, across all federal departments to ensure they advance Canada’s national interests in the 21st century.
This is about updating some very old fashioned bilateral stuff we still do with China, especially around stuff like agriculture and medicine.
Canada is also improving Trade Commissioner Service for Canadian exporters to provide services that ensure commercial opportunities are consistent with national security.
This is a big surprise, as it contradicts a lot of the signalling that we’ve seen from Global Affairs on the way trade comms are changing with Zero Covid in China.
Canada will continue to protect Canadian market access in China while working with clients to diversify within, and beyond, that market. Canada will continue to speak up for universal human rights, including those of Uyghurs, Tibetans and other religious and ethnic minorities. Canada will continue to stand shoulder-to-shoulder with the people of Hong Kong, who are faced with China’s imposition of the National Security Law and, more broadly, the deterioration of individual and collective freedoms.
This is the boiler-plate China-confrontation list, but it belongs here and so here it is.
• At the regional level, Canada will balance its approach to China with diversified investments in regional relationships and institutions and a strong vision for the country in the Indo-Pacific region. Canada will work to deepen a variety of partnerships, influence best practices, advance institution building and support a rules-based approach to a peaceful, prosperous and sustainable Indo-Pacific region. Canada will also continue to work with partners to push back against any unilateral actions that threaten the status quo in the Taiwan Strait, as well as the East and South China Seas.
This is the formal announcement of what we’re coining as the “ASEAN Hedge”. Canada is going to start looking at ASEAN as a way of ensuring that our primary resources find a market in Asia if things go terribly wrong with China. Obviously, these markets will take time to develop and there are significant winners and losers (42% of ASEAN is muslim, by example, so pork producers are unlikely to reap the rewards of a pivot there).
• At the multilateral level, Canada will work closely with its partners to face the complex realities of China’s global impact and continue to invest in international governance and institutions. Canada will pursue new solutions to push back against behaviours that undermine international norms, such as arbitrary detention and economic coercion. Where our interests overlap, Canada will partner with China multilaterally, as Canada is doing by co-hosting the 15th Conference of the Parties to the United Nations Convention on Biological Diversity in Montreal.
This is interesting, because the strategy basically drops the idea that we’re going to work with other countries on economic coercion, a new idea we’ve not seen so far from GAC. Maybe this shows we’re finally ready to implement the Strategic Shiraz Reserve, our favourite idea in multilateral politics.
We are investing in deepening our understanding of how China thinks, operates and plans, and how it exerts influence in the region and around the world. In this context, Canada will increase our presence, supporting analysis, consultation, and diplomacy related to China at Canada’s multilateral missions to the United Nations, the European Union and NATO to anticipate and respond to political, economic, and security risks, complementing previous capacity increases to Canada’s China network.
This goes hand in hand with the announced $60 million for CSIS to help build a strategy to counter China’s influence in Canada.
Canada’s Indo-Pacific Strategy
As we forge ahead with a strong, broad-based approach to China, we must always remember to differentiate between the actions of the current Chinese government, with whom we have differences, and the Chinese people. The bedrock of our relations remains the people of Canada and China. The long-standing connections we share and the extraordinary contributions of Canadians of Chinese heritage to Canada will continue to bring diversity and depth to our relationship for decades to come.
This is nice to read. 1 in 5 Canadians have roots in Asia, triple that of the USA and the UK.
While remaining consistent with our One China Policy, Canada will continue our multifaceted engagement with Taiwan, which includes collaborating on trade, technology, health, democratic governance and countering disinformation. Canada will oppose unilateral actions that threaten the status quo in the Taiwan Strait.
Ending with a note to Taiwan is a really good way of sending the message that this is an important issue without having to worry about changing policies. Smart.
Money, Money, Money
Quick breakdown of the total commitments made in the strategy.
1. Promoting peace, resilience, and security
To advance Canada’s regional peace and security interests, the Government will invest over $720 million. This includes, but is not limited to:
$492.9 million to reinforce Canada’s Indo-Pacific naval presence and increase Canadian Armed Forces participation in regional military exercises;
This is an outrageous amount of money for the navy. 500 million bucks is a huge deal for the whole of the Pacific Fleet! If you’re reading this from Victoria, BC, head across the bridge to Esquimalt and listen to the cheers from the base :)
$47.3 million to launch a new multi-department initiative to help develop cyber security capacity in select regional partners.
This is a lot of money on top of what was already committed last year to help shore up cyber capabilities.
2. Expanding trade, investment, and supply-chain resilience
To foster open, rules-based trade and support Canada’s economic prosperity, Canada will invest $240.6 million. This includes, but is not limited to:
$24.1 million to establish the Canadian Trade Gateway in Southeast Asia to expand Canada’s business, investment and networks in the region;
This was announced previously during the PM’s trip to ASEAN but its nice to see as part of the grand strategy.
$31.8 million to establish Canada’s first agriculture office in the region to increase and diversify agriculture and agri-food exports to the Indo-Pacific;
This strikes me as a lot of money for a single faucet of trade, but there has to be a reason for it being an independent line item. Will report back on this.
$13.5 million to expand natural resource ties with Indo-Pacific partners – in trade, investment, and science, technology and innovation.
Fairly small amount of money here, so interesting to see what the concrete deliverables will be.
3. Investing in and connecting people
To forge stronger people-to-people ties with the Indo-Pacific, Canada will contribute $261.7 million. This includes, but is not limited to:
$100 million in Feminist International Assistance Policy development funding to support the Indo-Pacific;
Previously announced, note this is int’l development money and the feminist part seems largely to be branding.
$74.6 million to enhance Canada’s visa processing capacity within Canada’s centralized network as well as in New Delhi, Chandigarh, Islamabad, and Manila to support stronger peoples-to-people ties.
This is to help the incredible backlog that happened during COVID get clear. This is a huge investment, given the ROI it makes sense.
4. Building a sustainable and green future
As part of its commitment to build a clean future, Canada has committed a total of $913.3 million. This includes, but is not limited to:
Editor’s Note that “clean future” has a kind of weird, Gattaca-esque ring to it. Just me?
$750 million to enhance the capacity of FinDev Canada to expand its operations into the Indo-Pacific and accelerate its work in priority markets in order to support high-quality, sustainable infrastructure.
Although this is a lot of money by Canadian standards, consider that in Cambodia alone over the last 7 years China has invested $18.5 billion. There is at minimum a 30:1 ratio between Chinese and Canadian investment in ASEAN infrastructure.
$84.3 million to help reinforce a healthy marine environment in the Indo-Pacific region including enhanced measures against illegal, unreported, and unregulated (IUU) fishing.
This is excellent.
5. Canada as an active and engaged partner in the Indo-Pacific
To strengthen its presence, visibility and influence in the region, Canada has committed a total of $143.3 million. This includes, but is not limited to:
$92.5 million to significantly expand capacity at Canada’s missions abroad and within Global Affairs Canada.
A modest sum, given the scope of activities.
$24.5 million for a new office of the Asia-Pacific Foundation of Canada in the region to help build and strengthen relations with local partners.
Funding the foundation is a great way to enhance our regional knowledge in Ottawa.
More Soon!
We’ll be inviting experts to weigh in over the coming days. Thanks for reading!