China is a good customer for Canadian agricultural products but it can be unreliable and even dangerous to Canadian business people. The agriculture industry has been advised to look elsewhere for reliable markets.
Easier said than done. Convincing a dragon to change its behaviour will require more than a beaver waving a stick.
China is a massive importer of food. Economists have long pointed to its swelling middle class as the future for exporters of resource products.
China’s food and resource import needs can often be met by a variety of exporters, even if that means shorting a market someplace else on the planet. China has the ability to use its unified state power to punish and threaten those who displease it.
Though not immune to the ravages of supply and demand, China can nonetheless inflict injuries to select industries in most countries, and with pinpoint accuracy. Canadian canola is one such target, believed to have been the victim of this country’s retention of Huawei executive Meng Wanzhou on behalf of the United States for her alleged dealings with Iran.
Already cranky about Canada’s politicians calling it out for human rights issues with its Muslim Uyghur population, China took the opportunity to remind its 40-times smaller trading partner just who calls the shots in the relationship.
Other Canadian agricultural exports still flow to China, in some cases setting records. China could hurt Canada a lot more if it wanted. We can look Down Under for an example.
Australia, despite having a free-trade deal with China, has seen its exports crushed by its giant neighbour. Timber, cotton, barley, lobster and wine businesses, all developed to meet Chinese demand, are being stifled. Two major grain exporters and several large abattoirs are, as in Canada, facing non-tariff trade interruptions.
Yet China has continued to import record amounts of beef and milk from Australia, though it has implemented its quota tariffs in both cases. As well, iron ore exports are seeing record shipments. That product isn’t readily available anywhere else in the world and until African sources are developed, Australia has some dignity in the relationship.
China has repeatedly used its punitive trade powers to mute its critics. Norway, and its fish farmers, spent six years on the outs after awarding a Nobel Prize to a Chinese human rights activist and the Dalai Lama. In August the dragon reminded Norway of what might happen should defenders of Hong Kong democracy be selected for the honour.
The U.S. has seen its own citizens pay tariffs on Chinese goods while China itself imposes tariffs or blocks American exports during the past three years of trade spats.
Several prominent Canadians have suggested we should expel Meng in an effort to free “the two Michaels,” Kovrig and Spavor, and ensure better trade relations going forward. Lloyd Axworthy, Hugh Segal, Ed Broadbent and Lawrence Cannon are among those who feel Canada should risk American relations in favour of Chinese. Others say that would capitulate to blackmail and kidnapping.
Either way, Canada loses. And Australia. And America. And Norway, England and New Zealand. The list goes on.
The Meng issue might settle itself in coming days and hopefully with it the saga of the two Michaels. That might make China seem like a more reliable market for Canada — until the next thing comes along.
China’s most reliable suppliers need to work together to help that country recognize where its interests lie. Otherwise, it could conceivably pick off our industries one at a time.
The market isn’t free. We have to earn it.
Karen Briere, Bruce Dyck, Barb Glen and Mike Raine collaborate in the writing of Western Producer editorials.