Federal agriculture minister Gerry Ritz recently said that he warned the Chinese ambassador to Canada that playing games with Canadian canola imports wasn’t very fair – or very bright. This brought to my mind the image of a big Canadian moustache flapping, a finger wagging and a Chinese ambassador looking unperturbed.
Letting the Chinese know, on a political level, that Canada has noticed this bad trade behavior is likely a good idea and farmers will no doubt be happy that this canola issue isn’t being treated like a minor matter by the federal government. Federal governments haven’t always made ag scraps priority issues. But whether we like it or not, China can jerk the rug out from under Canadian canola shipments and there isn’t much we can do about it. They’re able to act boldly, an analyst pointed out to me yesterday, because they’re a communist government and they can make their monolithic bureaucracy turn uniformly against whatever enemy they’re told to turn against. Sometimes that has been rats. Other times it has been sparrows. Right now, to its import inspection police, it’s foreign canola, which China claims is a clear and present danger to their rapeseed crops. So they’ve shut their borders.
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They’re also able to keep their motivations unknown, because decisions like this aren’t subject to any oversight or scrutiny by a parliament or a free press. So we’re stuck peering at the green tea leaves, wondering whether this recent move is a temporary way of giving their own rapeseed crops a way to get into the domestic crushing system first (the most likely explanation), or a permanent blockage on a major trading item for dark and mysterious reasons.
Dealing with China and its inscrutable decisions is likely to become a bigger headache for farmers in years to come, just as its growing economy is likely to become a bigger opportunity for our farm products. A late August issue of The Economist has a special report on China and its analysts conclude that the expectations of a decade ago that democracy would spread within China steadily and inexorably, beginning at a village level but proceeding upwards, have not been realized, and that democratic reform doesn’t really seem to be occurring. It’s talked about less than was common a decade ago. In fact, China’s attempt to develop a modern authoritarian, big government alternative to the “Washington Consensus,” by blending its communist power structure with authority-friendly confucianism, has produced something some call the “Beijing Consensus,” which is giving comfort to developing world autocrats who want their governments’ fingers all over their domestic economies.
The writers of the Economist report also note how China has massively increased its military power and capabilities, probably with the goal of overawing Taiwan and intimidating neighbors.
Oh how history repeats itself, the voice of the aborted historian in me whispers, repeating his long-held view that China’s political and economic evolution is echoing that of pre-First World War Germany. I recall reading much about power politics in Kaiser Wilhelm II’s Germany, a subject I learned much about from University of Saskatchewan history professor Ivo Lambi – an internationally respected expert on the topic and, very oddly, the (now deceased) father-in-law of our Production section editor, way back in 1994, when I was briefly a graduate student of history. I’ve mentioned this topic before in this space, but the present situation makes it seem worthwhile for me to repeat. (It’s a favorite historical hobbyhorse of mine, and I’m likely to repeat it at least annually.)
Germany in the pre-war period was only a semi-evolved modern state. It had incredible industrialization and the concomitant development of a wealthy, dynamic and aggressive bourgeoisie. This bourgeoisie demanded more political rights, like those enjoyed in liberal neighbors England and France. The Kaiser and the aristocracy, which still had direct executive control of the government, tried to distract the middle class with increased economic rights. Each time they gave the bourgeoisie some more economic rights, they’d settle down for a bit. But after a while, the bourgeoisie would get worked up again and demand more political rights once again.
After the Kaiser’s gang had given away about all the economic liberties possible, they took refuge in whipping up foreign confrontations to cause everyone to fall in behind the flag and forget about democratic reform for a while. This seemed to work, at least as far as keeping the bourgeoisie slightly beneath the boiling point, until 1918, when the Kaiser lost his job.
Of course, it set Germany off onto the course that caused the First World War, but Willy probably would have thought it had all been worth it if Germany had won and he’d stayed in control.
It’s obviously far too early to determine whether China is following the same course as post-1890 Germany, but it’s worth keeping in mind that some countries with rising middle classes and an autocratic power structure that doesn’t want to reform tend to pick fights with other countries, and begin to act like bullies. They have domestic economic reform but little political reform, like China today.
I’m certainly not saying that China is deliberately picking a fight here, or acting like a bully, because the most likely explanation for this canola blockage is that they are simply giving their domestic rapeseed a jump into the crushing system before foreign crop comes in. So, if anything, the Chinese are probably embarrassed by what they feel compelled to do to protect the interest of their own farmers. And in the grand scheme of things, a wrangle over canola imports doesn’t amount to a hill of beans.
But the fact that the Chinese have an autocratic power structure that is capable of what seem to us to be severe measures, and that they can act unpredictably and quickly, raises the question of how to deal with China. It doesn’t seem right to swallow our complaints and meekly accept this blackleg blockage and hope that it’s temporary and will fade once the Chinese rapeseed’s crushed. But if we don’t want to pee-off the Chinese and make them dig in their heels, that might be the best thing to do. On the other hand, if they’re acting like a bully for some as-yet-unknown trade or political reason, it’d probably be best to fight back, because you don’t tame a bully by giving in to him. On the other, other hand, maybe it’d be best for us to turn Chinese eyes towards another target so they’d leave us alone. How about Brazilian soybeans, or Aussie lupins?
At the end of it all, Ritz probably did all that could really be done in the circumstances. He made his show of annoyance. He dispatched officials to China. He made farmers and the canola industry feel that their problem was being taken seriously. Then he and the rest of us have had to sit back, wait, and wonder What is China Thinking? It’s a question we’ll probably find ourselves wrestling with for the next few decades.
