April 10, 2018 – Professor Paul Evans, UBC – “Dealing with Xi’s China and Trump’s America: What’s a Perplexed Canada to Do?”

Paul Evans (PhD Dalhousie) has been a professor at the University of British Columbia since 1999 teaching Asian and trans-Pacific affairs. Paul is the current Interim Research Director of the Institute of Asian Research.

His academic appointments have been as Assistant, Associate and Professor, Department of Political Science, York University, 1981-97; Director, University of Toronto – York University Joint Centre for Asia Pacific Studies, 1991-96; Visiting Professor, Asia Center, Harvard University, 1997-99; Acting Director, Liu Institute for Global Issues, 2004-5; Director, Institute of Asian Research, 2008-11.

Between 2005 and 2008 he was on leave from UBC to serve as the Co-CEO and Chairman of the Executive Committee of the Asia Pacific Foundation of Canada.

A regionalist rather than country specialist, he has held visiting fellowships at the Australian National University (1988); National Chengchi University (1989); Chulalongkorn University (1989); the East-West Center (1995); and the National Institute for Research Advancement in Tokyo (1999). He has been a Visiting Professor at the University of Hong Kong in 2011 and 2013 and Singapore Management University in 2015 and 2016 as head of the International Academic Advisory Panel for its School of Social Sciences.

The author or editor of eight books, his first was a biography of John Fairbank, his best selling with David Capie, a lexicon of Asia Pacific security terminology, and his most recent Engaging China: Myth, Aspiration and Strategy in Canadian Policy from Trudeau to Harper, published in 2014 by the University of Toronto Press.

An advocate of cooperative and human security, he has been studying and promoting policy-related activity on track-two security processes and the construction of multilateral institutions since 1988. He was a co-founder of the Council for Security Cooperation in Asia Pacific (CSCAP), the Canadian Consortium on Human Security, and the Canada-Korea Forum. He has directed exchange and partnership projects with numerous institutes in Asia and the Chinese Ministry of Foreign Affairs and funded by governments and foundations in Canada, Japan, the United States, China, Taiwan, South Korea, Thailand and Indonesia.

A member of the International Council of the Asia Society in New York, he also sits on the editorial boards of The Pacific Reviewand The Chinese Journal of International PoliticsThe Chinese Quarterly of Strategic Studies, and Journal Mexico y la Cuenca del Pacifico. He is a Canadian representative on the Expert and Eminent Persons Group of the ASEAN Regional Forum.

Transcript of the Talk

Professor Paul Evans, UBC –
“Dealing with Xi’s China and Trump’s America: What’s a Perplexed Canada to Do?”

Well thank you for the shortest introduction that has ever been given and actually one of the warmest and most generous and thank all of you for being here this morning and to have a chance to exchange some thoughts on where we are in responding to a China that is emerging . . . has emerged, it’s no longer emerging. China has emerged as a global power. And how Canadians should react to this situation as well as our American friends, is maybe the most important question of the early part of the 21st century. And Hugh when you kindly invited me in September to come and meet with the group again, and by the way, this is my second opportunity to meet with this Probus club and it was a delight last time and I accepted with alacrity the chance to be with you again. I have also met with other Probus groups in North Vancouver and in West Vancouver, and everyone has China on their minds. We have the US heavily on our mind, but China on our mind as well in a way that was unimaginable when I was a student and when many of you had your first contacts with China.

Now to help me get a sense of what might be on your minds let me ask a couple of questions of you first. How many of you have visited the People’s Republic of China? Extraordinary, extraordinary. Doug at the beginning quoted Graham Allison’s book “Is War Inevitable?” This is this Harvard prof who’s written this book. And by the way is a war with China inevitable? It’s a question mark and Graham is like my other colleagues at Harvard who are very eagerly trying to push the Trump Administration and to set up an intellectual framework that recognizes changing circumstances but, that war is not inevitable. The Thucydides Trap as it’s called, can be a trap and it is a real danger but Graham and others at Harvard of which by the way now I’m now part of a group, I’m spending a third of my time at Harvard with a group of their China specialists and their US foreign policy specialists on what we can do in a context of what is very clearly a slide in US-China relations. What can we do in that context to find some positive ways forward even under what looks like some pretty gloomy skies. When Hugh invited me at the beginning of September to come and talk to the group, as I say, I accepted with alacrity because this group has experience with China but historical memory. The idea when you’re a prof at the University and you go and you discuss the Vietnam War you discuss Mash, that was mentioned a few moments ago, *laughter* you know the 20-year-olds don’t remember that, they don’t even remember the Iraq War.

So, when we’re with a group of gentlemen who are roughly my own age and who have had breadth of experience, we’ve been watching China and have been living with China for most of our lives it introduces another dimension of comprehension. And Hugh, I can’t say how appreciative I am of the chance to come back. So, what can we do today that will situate a global China in the context of its global role, its relationship with the United States but, also its relationship with Canada. As some of you might have seen I’ve done a couple of books on the Canada-China relationship and recently have been doing a series of studies and working with Ottawa in the Global Affairs Canada, but also in the Prime Minister’s office on how Canada positions itself in dealing with a China that looks a lot different than 5 years ago, and that even looks different in the last year. The game, if I had spoken to you in September, in advance of Mr. Trudeau’s trip in December, I would have used a particular kind of analysis. Much of that still holds, as you’ll see, I’m an advocate of engaging China. We have to find ways to work with and live with China but, the circumstances now, 8 months from the time I was given the invitation have changed quite significantly. And if you’ve seen a pause, a kind of quietness in Ottawa on big China issues in the last eight months, it’s not a coincidence. Making sense of these new factors in play are changing the calculations in Ottawa and I think also the calculations of what’s going on in the provinces and the cities.

But, let me come back to that at the end, in the meantime we need to appraise* the bigger picture. What context are we in and why things change? Well let me focus on two areas of change. First, is developments in China in the era of President Xi Jinping and particularly after the 19th Party Conference in October and then the recent National People’s Congress meetings which have signaled and consolidated a new set of arrangements inside China, and China’s projection of what role it wants to play in the world. A year ago, I would have spoken about this differently, not dramatically, but there’s been some things we need to focus on China. Let me then say something a little bit about the United States and US-China relations. This is a game that is changing very quickly, and I think, excuse the phrase, going south very fast and then let me come back to Canada. Does that make sense as a sketch of today? Well let’s start with China, and what is the concept that I’ve suggested for you today is global China. China is in the world, it is a player, a major player, in international institutions, in diplomacy, in economy and not just as a place where things are manufactured but now is an integral part of global supply chains and an innovator.

Five years ago, we talked about production in China, now we’re talking about design in Chinese competitive capability moving into sectors like artificial intelligence and the next wave of manufacturing to think of China as the assembler, remember “made in China”? It is now it also becoming “designed in China”. And its aspiration is to position itself in a whole new economic way going forward, and that’s part of the picture and those forces have been underway for some time, they’re accelerating, they present opportunities and challenges. But what has changed in China in the last year is largely on the political side and the consolidation of the power of Xi Jinping, the president, which we’ve seen symbolized in the removal of term limits for a Chinese president. This is something, China had an imperial system for very long period of time, which didn’t have any constraints on a leader. Mao Zedong, the person who was alive and in power when I was a student in China in 1976, also didn’t have constraints on him. This was the turbulence of the cultural revolution, China is not a simple place to govern. But nevertheless, China has had a long, long, long tradition of single person dominance, some call it the emperor system. Deng Xiaoping, the person who opened China after Mao Zedong, I think is the most important figure in Chinese Communist Party history. Deng Xiaoping put sets of limits in place.

If you come out of the cultural revolution, where your country essentially pulls itself apart, where a leader sets in place such dramatic transformations that didn’t lead anywhere and that led to abnormal chaos. Deng Xiaoping comes in and opens China to the outside world that’s in a new kind of way they open the door. That’s a part of the story most of us know. But also, Deng Xiaoping and his colleagues around him set in place a series of mechanisms for 5-year terms for president. The kinds of a little bit of checks and balances to try to avoid the cult of personality and the disasters as the Chinese Communist officials themselves saw during the Mao Zedong era. Well, we’ve seen since October, that Xi has consolidated his power. It’s an interesting question how we think of him. And many in the press, occasionally The Economist but certainly some other kinds of media sources like to refer to him now as China’s dictator. And that’s a phrase that comes fairly easily in our vocabulary. I’m not quite sure it’s right. He is not a person who has absolute power, absolute control. China’s too big and complex for that and the Chinese Communist Party has not disappeared.

It is not the mechanisms within the party, many of them are still functioning. But he has been sufficiently powerful to be able to take the position, so he has no term limits. That doesn’t make him the leader for life, it just means that he can run more than two terms or at least he needs to go through a nomination process and a selection process, every 5 years. Think of it at its most charitable way, like Franklin Delano Roosevelt and remember the argument the Americans used for extending in their context under the extraordinary circumstances of the Second World War. The idea that Roosevelt could stay on for a third term. Well I don’t want to suggest this is an exact parallel to the Chinese case, but those who argue why they are giving the president these special new powers is that to deal with corruption, the agenda in changing the economy in China, that this person needs more than a decade to do that. Now is that the slippery slope to a new dictatorship? Is it a new tyranny that might emerge? Is there a new Mao Zedong or a new emperor in the making? I don’t think so but, it’s possible. And so, there is a whole new element of risk that is built in to this partly for people outside in the world -companies, universities, others that deal with China but also for the Chinese people.

And I can say with no hesitation that in my three visits to China since the party Congress in October that my Chinese friends, those kinds of intellectuals at the universities, some of the people in the ministries they don’t feel there’s been a sea change inside their country, but they’re not exactly pleased with what is happening. And I think one of the risks that comes with this new consolidation is that this is not just about one man. This is about the reassertion of the Chinese Communist Party as an organization that is going to be controlling the state and the society. And that we see increasing repression in China. Repression of dissident groups, repression of ethnic minorities, new kinds of controls on foreign organizations in China, non-governmental organizations and others that have outside connections. This kind of tightening and repression. And as I’ve been trying with my students to make sense of how do we get our minds around what this is and why is it happening?

You know, this is an extraordinary year this is the 500-year anniversary of Martin Luther and the Protestant beginning of the Protestant reformation. Well, as we know in Europe and inside the Catholic Church there was a counter reformation. There was a real effort to reconsolidate authority and legitimacy and primacy of the Catholic Church. Well again I’m not suggesting the Chinese Communist Party and the Catholic Church are exactly identical, please don’t get me wrong *laughter* but, in terms of organizational terms what you do when you’re faced with challenges when you see things slipping apart when the Chinese Communist Party is frightened, it is coming back. And Xi Jinping and has been a player in that, trying to deal with corruption issues and other problems but, they want tighter control.

Now this means a lot for businesses that are trying to operate there. Canadian businesses or American businesses, international businesses because of demands on control over reformation. China is moving towards a capacity to monitor, surveil its citizens but also businesses inside it’s country that’s extraordinary. My son is in the surveillance camera and software business. He works for a Canadian company called Evigilant* which is based here, and Will tells me that there are now almost 500,000,000 closed circuit cameras in China that are directly controlled by the government. 500,000,000. And within 4 years, they’re expecting those numbers to be about 750,000,000 cameras. That means one camera for every two persons. And China’s capability, it’s quite extraordinary, on facial recognition and license plate recognition, Will says they’re ahead of everybody. They’re introducing what is called a social credit system which is essentially a central database of people’s consumer preferences. Mash to use you in the front row, all of your purchases, your travel, they track every car as it moves around major cities. Google does it to on the Uber and car sharing the Chinese government and the Chinese security system has access to all of that information. Every card credit card purchase, and if you’ve been to China recently you know that you do everything without paper.

Have any of you traveled to China recently and discovered that you don’t use cash? Nobody has cash, they’re all using WeChat, a system which is on a cell phone and not an exaggeration, if you go into a McDonald’s in Beijing try to pay cash, just try, you can’t because nobody does and they look at you strangely, you pay with your cell phone, it’s a kind of instant banking. You can do that for everything from buying a McDonald’s hamburger or dumplings in a local place that is just a local kind of hangout through to buying a car through to buying a house you can do all of your purchases. Well that’s great except that it also provides an enormous amount of information that can be tracked and what we’ve seen with Facebook and Cambridge Analytica recently the scandal that’s unfolding around us multiply it by 100 the amount of information that is available about Chinese citizens to their government.

They’re systematizing this, that’s a bit frightening, what’s more frightening and is again part of this repression capability is that in addition to your commercial transactions your political actions are noted. If you have a criminal offense, if in some ways you’ve run afoul of the government or of the party, that’s part of the record and this is just extraordinary this social credit system in terms of its scope it’s an Orwellian nightmare not unique to China I think we’re going to be facing this in our societies already too, but China is further down this path. China’s speed. If there’s one identifiable characteristic of China, it’s not scale, everybody knows that China is big, its China’s speed – how fast things are moving and in surveillance and in the capacity for monitoring and repression my Chinese intellectual friends see this as going in directions that can be far more worrying than what they saw in Mao Zedong’s period. So, we do not need to underestimate how significantly there is a tightening in China at the same time that there is more openness on some elements of business practice in China, they still want technology, they still want certain kinds of control, but they’re opening and maybe financial services and other things. So, the metaphor is not China pulling into itself it’s trying to still connect to the world and in fact in some ways we need a bigger China, but that it is a world that is very complex.

And its foreign relations China is becoming more assertive. Xi Jinping has said that the rejuvenation of the great Chinese Nation, part of that is going to be China’s emergence as a great power, a capability militarily, a capability diplomatically, to define and protect core Chinese interests and that the definition of those interests have expanded slightly. Some of those interests relate to Taiwan, it’s immediate territorial areas, but also the South China Sea in areas where jurisdiction is in dispute to be sure, but that China has made clear that like other great powers it is going to define it’s interests and pursue them in ways that are going to be in somewhat more muscular. Now, I think we have put this in perspective. This is not Xi Jinping calling for a Chinese Monroe Doctrine, although there are some elements. If we want to see a country that moved aggressively to protect and expand its national interests, look at the United States after 1860 and during that enormous era of its expansion of direct colonial domination, expansion of its geographic frontiers. I think it is a real mistake to think that China’s future is America’s past.

I don’t think China is going to behave like the United States, but it is going to behave like a great power. That sometimes Xi Jinping’s new foreign policy is going to affect us here in Canada, I’ll come back to that in a moment, but it affects international activities too. Xi Jinping is saying we are tightening, we are becoming a great power, we are going to strengthen the Chinese Communist Party inside our country, but we’re also going to be global players. Xi Jinping’s foreign policy is partly about the United Nations you may or may not know, China is now the most important player in global peacekeeping of any of the P5 members. China has about 9000 peacekeepers, they’re ramping up, we’ve been doing some bilateral meetings with the People’s Liberation Army and with the Ministry of Foreign Affairs on this new peacekeeping role, because Canada used to be in the peacekeeping business we are a little bit around the edges now, but China is the coming player.

Well that’s globalism, when you get a speech by Xi Jinping at the Davos meeting this year, in general he gives the speech that my Canadian diplomat friends laugh at because they go to Davos and they hear two speeches, one by Xi Jinping or Chinese leaders and they say, you know that’s the speech we used to hear from the Americans about the necessity of strengthening global institutions, financial, the G20 agenda, the agenda for the World Trade Organization. China is picking up the mantle of that at the same time another country is going another direction, the United States. So, I want to paint this picture of a China that it’s going to be more assertive, more repressive, and at the same stage more global as the challenge that comes out of Xi Jinping’s China. There are new risks, but there also are areas where our interests and the Chinese converge.

Now let’s come back to the second part of this picture which is the United States. And I’m not sure of your views and your reading of what Mr. Trump’s America First is really about, I think I’ll try to be as neutral as possible in describing it *laughter* as my American friends are trying to do. The liberal world that I deal with (small L liberal world) that deals with that Harvard, these guys are stunned by what has happened to their country. It’s not a country they can recognize, so in that sense they have some things in common with those liberals north of the border and that’s with us here. But the unpredictability and the uncertainty about the global system that has been introduced and now being run through by the Trump Administration is deeply significant, As I mentioned, those Davos speeches, it’s hilarious if you look at them. If you look at it Xi Jinping’s speech should have been given by an American president, and the Donald Trump speech that was negative that was framing situations in terms of conflict and distrust of those institutions we’d had expected a Chinese premier of an earlier stage to have done that.

So then a little bit of a role reversal in this, but the Trump’s Administration’s response in the last few months to China is extremely significant because the best we could have said and done of, Horswill and I debated this, to discuss it when we both came into the room, I said let me talk about the Trump agenda and he said there is no Trump Agenda. There is a series of actions, Tweets that are moving several directions at the same time and I think we see that in many areas, who’s going to disagree with that? But I think that vis-a-vis China and vis-a-vis this new order, there are some consistent patterns that are now emerging that we saw possibilities for 8 months ago, but I think are now realities. One of them is that the United States under Donald Trump is framing China as a strategic competitor of the United States. We see that in the two sets of major economic trade policy actions recently, the tariffs on the aluminum and steel but more importantly I think recently the 301 actions against China using trade instruments to try to change Chinese behavior in several areas, Chinese behavior does need changing but this is bringing out the heavy artillery. 301 is the thing that makes our trade negotiators knees rattle here in Canada, because 301 can be brought out regardless of specific actions on the other side as a way of America to signal unhappiness and punish trading partners.

So, we have it on the economic side but in November and December the National Defense Review and the National Security Review, which are not regarding economics, at least not mainly about economics, these are about the defense of the United States and the security threats China is now being framed at the strategic competitor of the United States and a threat that demands mobilization of new resources. If Trump’s actions and his views of China were only economic, I would be optimistic that they are subject to negotiation in the long-term, that’s what we are all hoping that this is, posturing by two big, heavy-weights, before they get into the ring for the for a real discussion, and that’s what we’re hoping for. I’m a little bit more skeptical on that for one principle reason is that I think that it’s well beyond Mr. Trump that the United States does not want to face a peer competitor for global influence and that China is emerging and has the potential to be not only a peer competitor but to have the capacity to end American primacy not globally, but in Asia. And America, the idea of not being number one in every respect is something that is extraordinarily difficult for Americans to accept.

There is a fear of China, a perception of its rise, yes, that’s part of Graham Allison thesis, but the other thing is the rising fear of China in the United States. And if it were just on the economic side, dangerous as that might be we can deal with it, but I think the pattern that I see is that it also has this military and security side, and that one has me despairing and it’s what my Harvard friends are most concerned about, yes there are reasons to see China’s growing power and influence as a challenge to the United States, but on the other hand to see the Americans as having the capability to be the single global superpower, those days are over. And how America is going to adjust to accommodations with some of China and other countries desires. How they are going to find ways to negotiate with the Chinese on a variety of very sensitive issues that are now of global importance, this is the big question and that’s why I spend 1/3 of my time now in Boston, because our American friends, like Graham Allison, are trying to think their way through this.

I would say there’s one other point that is worth putting this strategic overlay in place, we need to give a little bit of attention to, and that is global institutions. One of the nice sides, or at least I think the constructive sides of China is that it made a decision in 1979 to start moving into international institutions. They had been in the United Nations but in the World Trade Organization has just been so fundamentally important. China is wanting to be a global player. It is now being a chief supporter of the United Nations operations in a variety of fields, it doesn’t want to use the organisation on human rights and other issues, but it does in terms of peacekeeping, in term of decisions around developmental assistance, a whole range of things. China has become a constructive global actor. In fact, let me point to a study that was done by a group at Oxford four years ago, where they looked at global regimes, global institutions that deal with issues including finance, use of force, climate change and the environment, and several other areas. And they did a survey of which country, the United States or China, was more likely to comply and be supportive of those international institutions. Which one of the two countries? Well they found that in six out of the eight areas, that China was more likely to comply with those institutions than the United States.

Now you can argue, you can pull parts of it, it’s not entirely persuasive, but the general observation that China generally when it joins international institutions and regimes and makes treaties, it lives by them, not perfectly but nor does the United States. The big super powers never accept international rules unconditionally, but China has made that effort to do it. So, we have this really complex picture of an emerging country that is, is it going to be a superpower? I think that vocabulary comes out of the Cold War, when we had Russia and the United States. This is a much different constellation of players. China wants to be part of the world system, but on Chinese terms. It is going to want to negotiate changes, in a variety of things including law of the sea, it is going to want to see renegotiations on issues related to weaponization of outer space, it’s going to want to see some of the rules of the WTO, the IMF… but it wants to play in those institutions.

At the same time that it’s creating a whole new set of institutions in Asia – an Asian infrastructure investment bank, the biggest development project in the history of the world, the Belt and Road Initiative, that is designed for basically infrastructure projects connecting China in just about every land and maritime route you can imagine. The investment that China is putting into the Belt and Road Initiative in Asia alone is 20 times the scale of the Marshall Plan that the United States put in place in Europe after World War II, by real dollars, by constant dollars. This is on a scale that warps the imagination. Whether it’s going to work and all of that, that’s another question. But I want to paint a complex picture of a China that is more repressive and assertive at the same time as it’s trying to play a global game and be acceptable.

So, what is all of this mean for Canadians? In October we did a survey, the most extensive survey of Canadian attitudes on China and Canada-China relations ever conducted. Some years ago, I headed the Asia Pacific Foundation of Canada where we began doing surveys. But this one we were able to do independently through UBC. And we asked 60 questions to a panel of Canadians about the depths of their understanding and what they what they understood about contemporary China and how Canada should respond. Now I want to give you just two little pieces from that, that set the stage for what I think is the current puzzle about the Trudeau government. The first finding we found, the first big finding, was more than 70% of Canadians support a free trade agreement between Canada and China. If you read The Globe and Mail, if that’s your principal source of information, you don’t believe that statistic. But 70% support and subsequent by the way we’ve done a second round of questions recently that has risen slightly, we did second survey. But so, has Global Affairs Canada and the Prime Minister’s office. Support for free trade agreement among the public in Canada is over 75%. This is extraordinary. And we were trying to figure out why that’s the case as we started to probe into people’s attitudes, do they like China? What do they think of the human rights situation there?

Canadian are pretty negative and accurately so. We are much better-informed public than in some ways we think. But in general terms why FTA with China? I didn’t have a lot to do with China it had a lot to do with the United States. And what I would call this extreme, sometimes dislike of the United States, but that’s not what’s significant here, at least of the Trump’s America, but a distrust of the United States as a trading partner, the pressures on NAFTA and we found that Canadians also felt the United States was trying to unravel the international economic order this was not just pressure on Canada through NAFTA renegotiation. We asked eight questions about global leadership which country is the more responsible leader, China or Canada, in areas including climate change, international peacekeeping, in terms of human rights, etc… etc… We found in six of those questions that we asked, Canadians felt that China is the more responsible leader than the United States. We fell off our chairs when we got these results, and we in fact we didn’t believe leave them, so we ran them again in a subtest and used another panel and we got the same picture. We ran one last month in Quebec to see if this was some sort of Anglo thing and in Quebec it’s the same case. This distrust of the United States, this anxiety about the United States is in some ways greater than the anxiety about China. So that was our trying to make sense of the FTA, but if you read The Globe and Mail, if you read our mainstream press which is extraordinarily negative about China, it’s a different picture.

So, my argument when I met with the editorial board of the Globe and Mail is I said the Canadian public is smarter about China then you are *laughter*. And the reason for it was not knowledge based, the Global and Mail has been extraordinary, but the pragmatism and the Canadian public seems to feel that when we deal with China, we are dealing with something much bigger than China itself, it’s a changing balance of power. Canadians overwhelmingly feel that within a decade not only will China be the largest economy in the world, it will be the most important power in the world. Again, when we get those 70% of Canadians telling us that as they look forward in a decade, that the most powerful country on Earth will be China, we fall out of our seats. I don’t think it’s true, but it is an accurate perception. Canadians feel something very big is happening, that power shift is underway. And I wanted to mention one other question we asked because I’ll bring this home them to all of us in this room.

The second, we asked a lot of questions but the second one that really jumped out, is we asked Canadians what do you think should be the most important priority for the Canadian government in dealing with China? What should be the top issue that Mr. Trudeau should focus on? Overwhelmingly it was trade and economic issues, investment questions, some anxiety about investment, but it was the economy, economy, economy, overwhelmingly. The second priority that Canadians identify was partnership with China on managing global issues. Wow. Partnering with China on management of global issues. And the ones that came up most frequently were peacekeeping which I mentioned earlier some people are starting to see that, but the most important of those global issues was climate change and environment, and it was off the charts in terms of expectations and hopes that we could work with China on climate change and, in fact global solutions, just put that word -global- in there and suddenly Canadians see that the problems we are all up against, that the path to solution, it may not run through Washington, it’s going to have to run through Beijing. That was the way we sort of interpreted it, and you’ll agree if you see the secondary questions. The third priority of Canadians, what should our government do in dealing with China, also astonished us.

It was not advancing human rights in China, that was a distant fourth. Canadians thought that their number one issue, they don’t like the human rights situation in China, we feel very firm about our institutions, but advancing human rights in China is something that is not the number one or the number two, it was a distant fourth. But it was that third item, that is protecting Canadian values and institutions at home. Let me just tell you what I think is behind that and I’ll conclude with it because it really resonates with I think the dilemmas that Mr. Trudeau is wrestling with. What are those Canadian values and institutions? The background to it is that everybody recognizes that China is no longer over there, a distant place which did some funny things, unusual things, exotic, fascinating civilization. All of that is true and it can be a muscular, international player, all of that is true, it is a global player. Chinese investment, Chinese people, Chinese culture, Chinese music, Chinese ideas are with us every day.

My students, each year I give them an assignment, first week, as I say go out on to the UBC campus and find 25 different ways that China is part of the University of British Columbia. Well they all come back, number one is of course – there’s a lot of Chinese people – and there’s 5,000 PRC- People’s Republic of China students at the at the University of British Columbia, maybe up to 6500 now, so they see that. China is with us, it’s on our doorsteps, Canadians recognize that real estate prices in the city of Vancouver or many parts of Canada are influenced by Chinese buyers, investments, well though foreign investments from China are very small, only about 3% of FDI in Canada, they’re more visible. Look at the controversy we’re having over AECOM, the construction company in Ontario that is being purchased by Skaton Enterprise, remember the issue over Nexen that Mr. Harper had to wrestle with. So Chinese investment, start going through these things and China is not over there, it’s here.

And it has people nervous, and in fact it was that finding, the number the, that protecting Chinese values and institutions that has been the subject of my work for the last year. I mentioned I’ve been working with some of our officials in Ottawa on this. I think this is the new challenge, and that the biggest challenge is that Canadians are apprehensive even as they want to do trade agreements, even as many of them want to open the gates to wider investment, they’re nervous about our political institutions and our style of life. And what I wanted to know over the last year is what are we really concerned about in that category? And if you’re interested, I’ll be happy to report the paper to you. We found 28 things that bug Canadians about this increasing Chinese presence, and two or three of them though are really significant. One of them has been a fear about the influence and interference in Canadian domestic affairs. Some of that relates to pressure on Chinese citizens or Chinese residents of Canada who are Canadian citizens around issues like return of political fugitives. At UBC, we have our websites constantly hacked and attacked in the work that we do on Tibet. And this is a kind of, you know, is it the Chinese government? Is a patriotic Chinese doing the this? This is complex, but we are we feel it.

If you are a Uyghur from western China, from Xinjiang Province, the pressures that you are under, because of your family members’ activities or your activities here in Canada, that reflect badly on the government of the People’s Republic there are some sharp elbows, there are some things that are happening that are not so pretty. Now the scale of them is not enormous, but that they do happen make some Canadians nervous, particularly our NGOs. Amnesty International and a Coalition of NGOs have just published a paper on what we might call intimidation tactics that have been used against overseas Chinese and others, here inside Canada.

Influence is one thing, China is going to try to influence the world to accept some of its positions, it’s a game that every country plays, but interference is something a little bit different with individual Canadians, and this is something that is part of the picture that we have to deal with. Another part of it is political interference, now this is not arisen as much as an issue in Canada as in Australia. If any of you have been following the Australian press, there’s been an explosion down there of concerns about Chinese efforts to influence Australian politicians through financial contributions and other kinds of incentives.

And there are clearly examples of what is called, in China they have an instrument for some of these activities, it’s called the United Front Department of the Chinese Communist Party, it’s been in place since the 1920s and its draw is to find friends internationally or within China but mainly internationally and to work with that and to identify enemies and to punish them. The United Front operates in Canada. Now is it out of control, as some suggest? I don’t think so, but nevertheless are these efforts by the Chinese government to try to influence opinions and groups outside of the country. In universities, my university college and particularly in Australia but to some extent in Canada are concerned about pressure on Chinese students who are here either to report to the embassy or the consulate, which we find very little of, or to take positions that are not critical of the government in Beijing. Every Chinese student here who is anticipating returning home has to be very aware of what they say and how they say it on Facebook, on all of social media, and they feel in their classrooms and for us that’s a challenge because our belief in our system here at UBC that my colleagues and I are pretty much unanimous on this, is we have to have an atmosphere where people feel safe to express their views and debate them.

We don’t agree with all views and I think we’ve done pretty well at it, but there are concerns and as we have seen this explode in Australia, where it is not just a matter of an academic atmosphere but academic integrity, where university presidents are being pressured by some in China not to sponsor conferences on controversial topics like Taiwan, or like Tibet or repression of Uyghurs. These are the things that are in the background of Canadian minds. There’s one other area that I will mention and finish with, which is on economic security, which is the idea that Chinese investment in strategic sectors in Canada threatens our national interest. And we’ve seen this recent debate around AECOM, the construction company, to me that’s a false debate, I don’t think that AECOM is a big problem from a national security perspective, what is more interesting is Chinese efforts to acquire technology and cutting-edge innovations in a variety of next-generation sectors, artificial intelligence, battery life, quantum physics programs. We have rules, Harper put rules in place where any Chinese investment over certain amount of money in the oil sector was probably not going to be permitted, there’s got to be a special review. I believe it was a billion dollars, I can’t remember if it was 500 million or a billion.

To me it was more most interesting, and where Ottawa is most concerned, not with any of those things I mentioned earlier, where Ottawa is most concerned is on National Security, Economic Security that we’re going to have our companies, with 25 million dollar investments, that may, if there’s fifty of them then they’re strategically warranted, you can dominate a sector. And as we look comparatively, comparing notes with Americans, Australians, Germans, there are particular sectors that China has started, and that is true. How they’re trying to acquire those technologies sometimes is through nasty stuff the cyber, the stealing. Much more likely, it’s through acquisitions or a recruitment of talent. So, these are elements of China’s presence in Canada that we think are some of the reasons for concern.

I’ll end with this, after Trudeau’s not entirely successful visit to China this December, but not disastrous either, I think the trip was, I would have given it a B+ but it sure didn’t get into the A category and there were some major, major miscommunications and mistakes. Things are even more nervous in Ottawa now, for the reasons of these increasing pressures, even as 70% of Canadians support an FTA, our government is being very careful on how it moves on this. And I think it’s partly because of this deeper anxiety about where US-China relations are going, imagine if we went out in front on an FTA with China, and as Ms. Freeland said, we don’t want to go out in front of that if it’s going to hurt us in our NAFTA negotiations. Ottawa has prioritized NAFTA. That may be a really good strategy, we’ll wait and see if we’re be negotiating NAFTA for 20 years. Moving forward or maybe we will come up with a deal, but I think that the challenge for Canada with NAFTA is not to treat it as just a relationship with Mexico and the United States. NAFTA, a free trade agreement with China is about global supply chains and value chains. And behind that, is a belief in rules-based order.

And that we can negotiate deals with a country that they won’t change or at least are not going to try and change the way the Americans under Mr. Trump are trying to change the trading rules between Canada and their country. So, Mr. Trudeau is going slow, when we find why is he going slow, I think until they get a new storyline, you got an assertive, nasty China, nobody thinks anymore that bringing China into the international system is going to change their domestic political structure. That’s a dream, that was a dream of engagement that is no longer sustainable. It never was a good bet, but it was very powerful politically.

We can’t believe that the more we work with China, the more we’re going to change them in our direction. They’re on a different path. It’s not necessarily a bad path, we have a lot of overlapping interests and commonalities. Their destination point in the imaginable future is not going to be liberal democracy. So that’s one limit which we’ve no longer can make the case ‘just keep doors open to China, they will change in our direction’. So, what is Mr. Trudeau tell us in this room, why should we deal with China? Well, China’s big, it’s important, but he’s going to have to be able to tell the story to Canadians to how we are being protected or insulated in intelligent ways from these new challenges inside our society. How is he going to reassure Canadian that we have capacity to screen Chinese companies before they make an acquisition and know in detail what is the agenda behind that? As much as I admire Ottawa’s management of many of these issues, we do not have the analytic capability in our government we do not have the expertise that is necessary to get into the next level of deep economic engagement with China.

So, I’m hoping that as we move on towards the Free Trade Agreement Mr. Trudeau is also going to be able to tell us that part of the story of how do we protect Canadians as this moves forward. I think they’re doing a pretty good job, but until they get that story ready, and until they can say where are we are going to position ourselves if the US-China relationship continues to deteriorate. The Australians agonize over the question of what they would do if there was a US-China military exchange in the South China Sea. What do we do? They have an alliance with the United States, their principal trading partner by far is the People’s Republic of China. That dilemma of how you position yourself in this coming multi-dimensional conflict between the United States and China is a question that our government, I don’t think they have an answer to and I don’t even think they’ve thought their way into, how they’re going to answer this question and I think that’s part of the reason for going slow.

Q & A

Question: You never mentioned Japan in all of your talk. I know that’s a big area, but I’m just interested where does China sit with Japan and what about other countries like Australia and Canada and so on, our trading relations?

Answer: Japan is a close friend of Canada in many ways. I think I’ll be coming at this with a geostrategic level for this one. Where Japan is building its relationship with China is a really significant question, because over the last decade, they have been increasingly hostile and difficult with each other in political and military terms even as their economic relationship has been very strong. Japan does more business with China than it does with the United States by a long shot, but I think that in light of what as I put it last 8 to 10 months, Mr. Abe has taken a somewhat more conciliatory line in making what I think are the elements of the accommodation with Xi Jinping. And I figured a couple of things. Japan’s likely to join the Asian Infrastructure Investment Bank, they are very likely to participate in the Belt and Road Initiative, which they have opposed. Abe had been pretty close to an advocate of a containment of China approach. He still wants to contain the Chinese on certain issues. He wants to work, as you put it, I think, quite accurately with the Australians and with the Indians in this new idea of the Quad, the four democracies, Australia, Japan, India …. oh, and the United States *laughter*. That was a Freudian slip, boy are they moving in the wrong direction. Nevertheless, this is an idea that’s still trying to float. But I think, my sense and I’ve made a couple of trips to Japan in the last 8 months, many are shaken by Mr. Trump too. And most importantly, I think in Asia, of the Japanese, they’re really, really smart on reading the Americans. And while they know how to flatter Mr. Trump, in a way they’re scared to death of the man, because of some threats he’s made on Japan, I think they’re reassured about the alliance at this point, if it’s formed, but they are worried on the economic front. When they see 301 used against China, they don’t like some of the things the Chinese do, but 301 can be used against them too in big ways, aluminum and steel which are going to hit Japan as well. So, I think that the Japanese are beginning to edge a little bit in the direction of a more positive approach to China and partnerships where possible. So, it’s gone from the strongest as advocate of containment and kind of Cold War 2.0 with China, through an effort to try to warm relations. I think we’re going to see this with virtually every one of the American partners in the region, where no one is abandoning the United States, some still feel the United States will come back. This is reversible, the situation now isn’t going to be there forever, it wasn’t there three years ago, why do we think it? The Japanese though I think have thought beyond Trump, and their analysis is that the fractures in American society are so deep that the dysfunctionality in the American political system, the party system in particular, is so deep that putting all of your eggs in the American basket, even as tempting as it is, does not make sense when just across the water is a big, diverse, assertive country that you might want to deal more with. This is controversial line because I think your question behind it, is the premise that Japan is important to Canada as a counterweight to China. There’s been a powerful case against that in the past I don’t think that case is as powerful now as it was 8 months ago.

Question: Could you comment on China’s activities in Africa, the corruption they’ve exploited along with that?

Answer: I hope that if this is of interest, you’ll come to my seminar. I teach a grad seminar on global China and world order and I now spend a third of the course on China in Africa, China and Africa. Because remember I used the phrase global China? China’s not just present in the advanced, industrial economies or in it’s immediate neighborhood. The area where we can put a magnifying glass up to see Chinese intentions and activities that having a major impact, are in Africa. And, of course, as Sarah Palin didn’t quite understand, Africa isn’t a country *laughter*. Africa is a very complex place with many different kinds of countries, regimes types, economies, it’s a continent, it’s a world on itself in many ways. But, I’ll say just a couple of things to introduce the discussion. First, is that the Chinese presence there is varied dramatically from place to place. Now people ask the question, is China the new colonial power in Africa? It’s a good question to ask. The answer to that is yes, and no. It is in some places, in some sectors with an incredible exploitative view. In other places, because the game is not just the Chinese State and Chinese state-owned Enterprises, there are millions of Chinese moving into Africa to run small businesses, to run hospitals, it’s a very complex picture. So, the first thing is that you really just got to break Africa down, place by place, issue-by-issue, and general view is mixed. But, I think the other side of it is what Africans think of China. And if you see all of the international polling on this, it’s fascinating. Africans, if we do 20-somewhat countries, in general, and there are exceptions, but in general, Africans are much more positive and warm about China than they are about the United States or about colonial Britain, but more importantly than other countries’ views of China, and we’ve been trying to puzzle through why that’s the case. Well one thing, is that now that China feels it’s so great power, and that it’s model of development not only makes sense for China but might make sense for other parts of the world. The only place that gets resonant is in Africa. There are several countries and leaders that have expressed admiration for the Chinese capacity to raise people out of poverty. And you know we can talk about successes and failures in China, but one of the great successes has been rising people out of poverty very quickly. Now, whether a deeper connection with China is going to help them do that, that’s a debate. But, this idea that China has something to offer in it’s authoritarian model, unconditional grants, rather than tying them to good governance criteria…And by the way, Xi Jinping has just created a new development agency in China, for the first time, China puts a lot more out in ODA than comes in, but they consolidate it. So many Africans now see China as not the solution, but as part of the solution to their woes. So, the picture is mixed, but on this part really interesting. Please come to our seminar.

Question: In any trade war no one really wins, in the case of US and China, who do you think has the most to lose?

Answer: All of us. Who has more to lose? You see if I thought it could simply be a battle between the United States and China on tariff matters, I think we could survive that. However, the chances of it spilling over, if this happens, fingers crossed that this is really just bargaining, although as you know, I don’t think it is. I think it’s deeper. If it would just be a trade war, that’s fine, but this has the capacity to become an economical war. And you know, it’s always funny to me that you’d want to pick a fight with a country that owns 1.3 trillion dollars in your foreign security. The Chinese analysis of this is, we want to help the country but we also have a problem with Americans on trade, we’re also going to have a problem next with Americans on our currency. And the tax on the view that Mr. Trump’s advisors have of China’s currency is a major obstacle to American jobs. So the escalation within the US-China broader economic relationship is possible. Why I think your point about nobody wins in a war, is right, is this is not just going to be just a war about economics that affects those two countries. Imagine if you are trying to run any corporation that has a global supply chain or fits into it. Can you imagine the disruptions that come with that? And particularly if this kills the WTO as a functional system, that this is not just a trade war, this is the beginning. My lectures this year in China have all been on the theme of what lessons we can draw from the 1930 commitment. And to go with the group here, I didn’t quite make it into the 1930s, I wasn’t as part of it, but the dark skies that we’re under, in terms of an uncertain American role in terms of liberal democracy itself eroding, collapsing including in the most important to democracy in the world. But these are really dangerous times. In the 1930s, were exactly a moment where trade wars developed into economic wars but then also spilled over into being a political military as regimes collapsed. Sorry I don’t mean to be unduly negative, but if I’m looking for an era of comparison to ours, it’s the 1930s.

Question: What’s of interest with China and the European situation in Syria, and what is its relationship to Russia?

Answer: The answer is that Russia and China do not have identical interests, but it is sometimes useful for them to ally strategically in their competition with the United States. So, let me frame it that way. The Chinese role in Syria is a secondary role. They are involved around the edges, they don’t oppose the Russians, but nor do they actively support them with weapons and other things. If you would like just that as a quick answer to your question, it’s a bit glib. There is a great new Chinese movie out, and it is called Operation Red Sea. Now, get this, if you’re trying to see through a popular culture, big blockbuster movies what China thinks of the world right now, Operation Red Sea is really interesting. Because it’s a story that is set around Libya. And when Gaddafi collapsed after the attacks there, the Chinese for the first time evacuated almost a hundred thousand people from Libya, mostly Chinese citizens, worker who were there, but also Libyans of Chinese descent, and others. And this is a great movie about how the Chinese People’s Liberation Army Navy comes into the rescue of distressed people in Northern Africa. And I couldn’t imagine this being made three years ago, where you come see a huge film. It’s the biggest grossing film in Chinese cinema history. This thing is just coming out and it’s about the constructive role of Chinese over there solving problems that the Americans created and can’t stop. So, what I’m getting at through that metaphor is that for worse and for better, China is going to be a player in some of these areas in ways that we like, and in ways that we don’t like that. And we’ll see it in the cinema.

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