Canada Confronts Reality: China Closed for Business - Charles Burton

04 Jan, 2024

For over four decades, Canada has aimed to tap into China's vast market and economic strength.

Despite past challenges, there is a risk of reverting to old patterns in Canada-China relations after the resolution of the Michaels Kovrig and Spavor case.

However, the reality is stark: China is currently closed for business. In 2023, China faced economic concerns like deflation, a real estate crash, declining consumer demand, and alarming youth unemployment. Foreign investment plummeted, and Canada suspended its involvement in China's Asian Infrastructure Investment Bank.

Chinese leader Xi Jinping's meeting with U.S. President Joe Biden raised hopes for improved relations, but six weeks later, little progress has been made. Canadian businesses shouldn't expect favorable prospects with China in the near future due to various reasons.

Domestic discontent in China might lead to the nationalism card being played through military engagement, and the regime reinforces its control over the economy. Foreign businesses face challenges, including arbitrary commercial disputes and restrictions on data security.

Concerns about China's political stability are growing, marked by high-profile purges in 2023. Despite internal challenges, China continues its global ascent, from controlling shipping lanes to building military capabilities and collaborating with anti-Western states.

As Canada navigates its foreign policy in 2024, balancing relations with both China and India is crucial. The government must collaborate with businesses to integrate into the Indian economy, reducing dependency on China. India's growing population and democratic values make it a strategic ally against the China-Russia-Iran axis.

In a world marked by interesting times, Canada faces a complex challenge. Charles Burton, a senior fellow, urges a clear understanding of Canada's interests and a proactive approach to avoid long-term peril.

Charles Burton is a senior fellow at the Macdonald-Laurier Institute, non-resident senior fellow of the European Values Center for Security Policy in Prague, and former diplomat at Canada’s embassy in Beijing.

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