Canadian PM Softens to China

After his February 7 to 11 summit in Beijing, Canada’s Prime Minister Stephen Harper might quip, “I came, I saw, I cuddled.” How uncommon for Harper to show his softer side as when he petted the two panda bears that Beijing gave him as a gift.

Like so many other foreign leaders, Harper proved that the enticing Chinese market melts a heart faster than the somersaulting furry critters do.

When Harper won power in 2006, he vowed that he would not cave in to “to the almighty dollar” and trade without promoting human rights and "values." Before the Asian Pacific Economic Conference that same year in Hanoi, tension between Harper and Chinese leader Hu Jintao precluded a parlay. In 2007, the bespectacled Canadian infuriated Beijing when he conferred honorary Canadian citizenship on the Dalai Lama, giving the Tibetan spiritual leader a cultural permit to quaff Moosehead Beer.

Hu hit back, denying that China commits rights abuses. The foreign ministry excoriated Harper for "gross interference in its internal affairs." When Tibetans rioted in 2008, Harper implored Beijing to show "restraint." Then he snubbed Beijing when he skipped the Olympic Games that same year.

Finally, ties warmed enough that Harper visited China in 2009. Premier Wen Jiabao publicly chided his guest, asserting: "This is the first meeting between the Chinese premier and a Canadian prime minister in almost five years." Harper shot back, "It’s almost been five years since we had yourself or President Hu in our country.”

Canadian business interests lobbied for a commerce-first approach -- and won. Yes, during this second encounter, Harper denounced Beijing’s veto of UN resolutions that pressure Syrian dictator Bashar al-Assad. And yes, he raised the case of Husayin Celil, a Canadian citizen and ethnic Uyghur detained in China for agitating for the rights of that ethnic group.

But Chinese officials merely humored Harper, allowing him to save face given how his once-pointed words and actions had boxed him in. The Chinese remained cool headed knowing that after airing his views, the bottom line would be...the bottom line.

In fact, what stands in bold relief is that Harper concentrated on securing close to US$3 billion worth of business deals across 23 agreements that span energy, education, natural resources, farm produce and science.

Vice Premier Li Keqiang implicitly claimed victory, encouraging “common ground while shelving differences.” Bilateral commerce has tripled from 2001 to nearly hit the US$60 billion mark in 2010. China ranks as Canada’s second biggest partner. The land of bamboo has plunked down US$14 billion in investments in the land of the maple leaf.

A Foreign Investment Protection (FIP) accord– or will it be a discord? – is the highlight. For close to two decades, Canadian investors have suffered huge losses from China’s copyright violations, the transfer of production techniques and capricious decisions. An objective third party arbitrator will adjudicate future complaints.

Paul Evans ranks as one of Canada’s leading analysts as the director of the Institute of Asian Research at the University of British Columbia. He explains that, "Harper was never against trade [but] pursued ‘warm economics, cool politics,’ meaning you could hit China on its human rights and still trade. This was half right, but overlooked missed opportunities. Canada has re-established a constructive relationship with China almost exclusively on commerce. Small Canada is playing on global China’s terms."

In addition, Evans observes that, “Harper included energy sector executives like the president of Enbridge, the principal promoter of the controversial Northern Gateway pipeline.” Canada wants it to pump oil to its West Coast for shipping to China. But unlike previous visits, he dropped members of the opposition parties and First Nations natives.” Clearly, Harper sought to dominate.

Even so, “the visit was a triumph here,” Evans said. “The deals and panda hugs played to domestic constituencies. For policy, Harper's Conservative government returned to where [centrist Liberal Party] former prime minister, namely Paul Martin, positioned Canada in 2005. Martin signed the strategic partnership with China's President Hu Jintao, though without the interest in broader global issues.”

The economic agenda, Evans says, “has shifted to investment, especially in Alberta energy. Harper has reversed his position that Canada will not export bitumen to China. Now that is a national priority. In style and content, the reversals are remarkable and without clarification of broader strategic objectives.”

As for China’s furry ambassadors of goodwill, “Conservative spin masters say that the pandas are the first sent to Canada. So Harper succeeded where [centrist Liberal Party] Prime Minister Pierre Trudeau failed,” when he went to China in 1973. In fact, recalls Evans, “China loaned two pandas to the Calgary Zoo for the 1988 Olympics. Maybe conservatives do better with panda imports.”

A brass tacks explanation is that Trudeau offered too little of value -- his four industrious, buck toothed beavers fell short. China relinquishes its precious two toned pandas if it calculates that the other side will enrich or strengthen it, i.e. 'You want the bear? You gotta pony up!'

Between 1998 and 2000, Charles Burton was a councilor in the Canadian embassy in Beijing. Burton says the 2009 parlay was constructive because of its effort to promote Chinese tourism to Canada. It worked because the level has jumped by a quarter.

He underscores that Harper’s chief aim was to attain the FIP. But “we have not seen the final FIP text and also wonder if China will honor its concessions." In short, does the FIP dissolve a vexatious sticking point or is it a new tar pit of acrimony? Harper’s hosts only agreed to "finalize" the text even as he hailed the breakthrough.

Burton confirms that Ottawa will approbate Canadian uranium producers selling to China’s civilian nuclear sector. After all, Cameco Corp, the world’s number one provider, is Canadian. In spite of China’s growing military nuclear sector, Harper liberalized accountability. "I am confident Ottawa would not sell uranium unless there are safeguards to ensure peaceful use, but it is still hard to comment,” Burton said.

How to explain Wen Jiabao's tussle with Canada's Minister of Trade Ed Fast? When the former expressed interest in a free trade pact, the latter cautioned, "Let’s not get ahead of ourselves here." Burton asserts that, “Canadian apples …would likely devastate China's produce.” Plus, Canada leads China in certain high tech aspects like mining and in banking and insurance. Under real free trade, “China cannot compete…so we doubt its sincerity."

Beijing is unwaveringly candid and honest about its search for energy. Li said that trade ties have a “long way to go …China is facing mounting resource…pressure." Burton agrees, citing Beijing’s interest in the Northern Gate project. “It needs China's expertise in areas like infrastructure. China is eager to get oil from more stable countries than its present suppliers such as Iran. We have seen US$ 18 billion in Chinese state owned firms' investment in Canada's top eight oil projects in the past two years."

So the horizon for profitable commerce is set to expand as two pandas head for their new home among the moose.

(Victor Fic (vfic@hotmail.com) is a veteran Canadian journalist who studied at the University of Nanjing and is now in Toronto.)