‘China taking tariffs off doesn’t solve the problem’: What a potential Carney-Xi meeting means for Canada-China relations

Video

Charles Burton, senior fellow at Sinopsis.cz and former diplomat at Canada’s embassy in Beijing, discusses Canada’s complex relationship with China as Prime Minister Carney prepares for a potential meeting with President Xi Jinping. As our government begins to thaw its frozen trade and diplomatic relationship with the Middle Kingdom, he examines China’s use of economic coercion tactics and warns about the security risks of Chinese electric vehicles. He also touches on internal challenges facing Xi’s leadership as CPP officials meet, including recent purges that suggest potential instability within China’s power structure.

You can listen to this episode on Amazon, Apple, and Spotify.

Program Transcript

This is an automated transcript. Please check against delivery.

HARRISON LOWMAN: Welcome to Hub Hits. I’m Harrison Lowman, Managing Editor of the Hub. Well, as Canada begins its slow thawing of its relationship with China, following years of that relationship being frozen solid with Carney and President Xi being expected to meet any day now, and the Chinese Communist Party meeting to plot out the next five years of China, there’s no better time to get a sense of what the Middle Kingdom is thinking. And for that, I’m joined by Charles Burton, a senior fellow at Synopsis cz, a Chinese focused think tank based in Prague, former diplomat at Canada’s Embassy in Beijing, and author of the forthcoming book the Beaver and the How China Outmaneuvered Canada’s Diplomacy, Security, and Sovereignty. Charles, thanks so much for joining us today. How are you?

CHARLES BURTON: Good to speak with you.

HARRISON LOWMAN: Okay, so Foreign Affairs Minister Anita Anand was in Beijing recently for what are called advanced discussions that could lead to that meeting between the folks behind me, Chinese President Xi Jinping and PM Carney before the end of the month. What are your betting odds, Charles? Is this meeting actually going to occur?

CHARLES BURTON: Well, I mean, it’s not confirmed, and Mr. Xi has a lot going on in China with the fourth plenum of the Congress, where he’s under considerable challenge from the Chinese military. But let’s assume he goes and let’s assume he meets with Mr. Carney and he meets with Mr. Trump. Our main concern are the arbitrary imposition of tariffs on Canadian agricultural exports to China, specifically canola seeds, which are now essentially blocked from the Chinese market. That’s a significant move by China to leverage us by using economic coercion because there are 40,000 prairie farmers involved in the production of canola seeds. And it’s a $12 billion a year business. And last year, before China imposed these punitive tariffs, we sold over 4 billion to China. So it’s a big, big market. The Chinese did this in retaliation for our imposing 100% tariff on electric vehicles. The reason that we did that was that China heavily subsidizes these things, and so they would devastate our own market if they came into Canada. It’s a superior product, better battery technology, much cheaper. But the other concern which I expressed in Parliament is the potential for espionage by these machines. They’re similar to Huawei Telecoms.

HARRISON LOWMAN: Charles, you wrote spot. You called them spy machines on wheels. Is this the case really?

CHARLES BURTON: Well, China won’t let the Teslas go anywhere near sensitive sites. I mean, they gather terrific amount of information of where they go and on the people who are driving them. And there’s also like the neptech technology that we decided not to use for scanners in Canadian embassies and consulates around the world, they have software updates which come from the manufacturer. So if there was conflict between Canada and China, it’s possible that, conceivable under current conditions, that China could cripple them. So we’d really have to address those serious issues before it would be a good idea to bring them in. Not to speak of. I was on a radio show in the United States and mentioned that we were considering allowing Chinese EVs to take over our market. And an American commentator suggested that Mr. Trump might stop them at the border. So if you were heading to your condo in Florida, you know, you could walk in, but the car would have to stay on the Canadian side. I hope Mr. Trump wasn’t listening, because that might, in fact, give him an idea.

But, you know, it’s still under consideration. We don’t know where it’s going to go. The issue really is in dealing with China. If we do get them to take off the tariffs on the canola, it doesn’t solve the problem, because next time China wants to leverage us to prevent us from, say, expelling agents of espionage or other concerns over Taiwan or the South China Sea or, you know, any number of things that, that we have going on with China, they can simply engage in this economic coercion on something else. They could declare our pulp and paper products are dumped, for example. So when you have a country that doesn’t respect the agreements and, and falsifies some reasons for barring Canadian products from the Chinese market, it’s sort of like whack a mole. You saw one, it’s quite likely that they would use another. If, particularly if, if they achieve their end to get the Chinese EVs into Canada by, by removing the tariffs on the canola, that would, I think, in my view, embolden them to do more.

HARRISON LOWMAN: Charles do we have a sense of what Mr. Carney thinks about China? You recall Mr. Trudeau was pilloried for his remarks made before he became prime minister about how he envies the China’s ability to sort of get things, can get things done, because it’s an authoritarian country. We’ve seen Carney recently muse about how China’s a country run by engineers. Do we know, do we have clues from his past as to what he thinks about this country?

CHARLES BURTON: Well, I mean, Mr. Carney has done extensive business in China over the years, and as from your photograph there, has met with Xi Jinping, and so clearly he thinks that it’s an opportunity for Canada. And I think there’s also a political perception there that the Prime Minister should be seen as trying to diversify our exports away from the United States in a situation where we’re seeing auto plants moving over to the States, thousands of workers out of work and economic decline due to the America first policies of Mr. Trump.

The Prime Minister really wants to show that he’s doing something to try and, and address this issue. And expanding our trade relations with China is certainly a big part of it, but it doesn’t come without a cost. China’s not going to give us a promise of further access to their market unless we’re going to give them something back. And what they want back is what they refer to as some seek common ground while setting aside differences. So they don’t want us to pursue Chinese espionage, you know, the transfer of dual use military technologies to the Chinese state. They definitely don’t want us to enact the Foreign Influence Registry that came into law in Canada in June 2024 with Bill C70, which the government so far has not implemented. We don’t have a foreign influence Commissioner and we don’t have the, the registry because it requires an order and council appointment. And the government has not made that. There are just any number of things that China doesn’t want us to do. They’d like us to stop our freedom of navigation exercises in the South China Sea. They’d like us to cease our support for democratic Taiwan.

I think it has even been broached by the Asia Pacific foundation that China might ask us to join the Belt and Road Initiative, which is a global infrastructure project where all the belts, you know, shipping facilities and roads, rail and so on, terminate in China and fulfill the economic portion of Mr. Xi’s overall program of what’s called the Community of the common destiny of mankind, which is a remaking of the world order precedented on his assumption that the United States is a power in decline and that the institutions that support the rules based international order, the WTO and the UN, will fade into irrelevance as China becomes the dominant civilizational force on the planet. I mean, that’s Mr. Xi’s idea. I’m not confident that he can realize it by 2050 as he proposes.

But those are the foreign policy imperatives that China has publicly stated and I think we have to respect that. So where Canada fits into this, you know, China I think would like us to be a supplier of raw materials for China. They’d like access to our northern resources Their, you know, their idea of China being a near Arctic state and more and more present in the Northwest Passage, I think is a concern to us overall if China’s able to achieve their program and if the United States ceases to become interested in defending the interests of the west and Japan and Korea, as may be the case under Project 2025 that Mr. Trump seems to be following.

HARRISON LOWMAN: You talk about Trump, Mr. Carney is no doubt responding to the fact that a lot of Canadians aren’t feeling so warm about Trump and the U.S. given his annexation threats he’s responding to. And I’m sure you saw this poll favor reviews of China from Canadians are now triple an all time low seen in 2021. Still negative, but they’re going towards the positive. And the fact that this is the second biggest economy in the world, from your diplomatic perch, Charles, is it that we shouldn’t, we can’t fully trust or engage with China until it’s a democracy. How should we treat it and how does it view, you know, trade and diplomacy? Does it see them as separate?

CHARLES BURTON: Oh, no. I mean, China is an integrated party state, industrial military complex. And so they don’t do anything without looking at the whole, you know, it’s all dominated by the Chinese Communist Party, which some people say is like God invisible, but everywhere present. And so, you know, when we look at how China relates with Africa, countries that they’ve been investing in in the Belt and Road and supporting enabling dictators with surveillance technologies and so on, are typically countries that have favorable port facilities that China could use for future blue water, navy and submarines. So, you know, they’re working long term and in a comprehensive way. And I think within Canada, you see a similar process of China gradually attempting to achieve a comprehensive influence in our country.

Not just the elections, but, you know, the attempts to subvert policymakers and to have investment in Canada that they can then leverage for their geostrategic purposes. You know, would we continue to deny China access to mining resources in the north if they would respond by punishing us economically? So I think the key here is that we shouldn’t be too dependent on the Chinese export market. So in the case of Canola, clearly we put too many, too much of our Canola into one market. And we should be trying to diversify so that when China engages in arbitrary tariff measures to leverage on other issues, that we can take the hit more readily. And I think that certainly that’s something that government is attempting to do. You know, we need to strengthen the Trans Pacific Partnership. We need to Strengthen our relations with like minded Asia Pacific countries. And of course, if there was a political change in China where China became more respectful of the rules based international order and you know, got more as a stakeholder in global affairs, I think that would be better for China and for Canada.

But right now their government is involved in this idea of trying to redress the colonialism of Japan and the west by becoming the dominant power to which all of us will be subordinate. It’s not a realistic program, but it’s certainly one which takes up a lot of the energy in our, in our relations. And as you say, if China did become a democratic player, it would make it much easier for us to engage with them because we could be assured by independent rule of law and assurance that contractual relations would be maintained.

HARRISON LOWMAN: The humiliation is what you often hear the Chinese say. Two final questions for you. You talk about leadership and power. China’s hosting its fourth plenum. All the senior officials from the CPP meeting to plot out the next five year plan that the country will take any rivals that Xi is facing. I note that he recently purged China’s number two general, fired numerous senior officials. Is this just par for the course or is there actually some sort of opposition afoot within that country? Or do we even know, given how restricted we are, what goes on there?

CHARLES BURTON: Oh, it’s certainly not par for the course. I mean, of the three since the past three years, the three top uniform members of the Chinese Communist Party Central Military Commission have been removed. That’s very irregular. And a lot of the people in that nine, who are just the top nine, I mean, we’re talking hundreds of members of their factions who’ve been removed were people that had been appointed by Xi Jinping relatively recently. So I think one cannot but feel that there is concern in the military about the economic decline of China under Mr. Xi’s policies. And whether Mr. Xi is able to contain this or whether there’s a general erosion of the system which could lead to his removal from power remains to be seen. When that will be, I don’t know. But I mean, I’ve been predicting Mr. Xi’s demise for quite some time and eventually I’m going to be right because he is, after all, human.

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Charles Burton, senior fellow at Sinopsis.cz and former diplomat at Canada’s embassy in Beijing, discusses Canada’s complex relationship with China as Prime Minister Carney prepares for a potential meeting with President Xi Jinping. As our government begins to thaw its frozen trade and diplomatic relationship with the Middle Kingdom, he examines China’s use of economic coercion tactics and warns about the security risks of Chinese electric vehicles. He also touches on internal challenges facing Xi’s leadership as CPP officials meet, including recent purges that suggest potential instability within China’s power structure. You can listen to this episode on Amazon, Apple, and Spotify. Program Transcript This is an automated transcript. Please check against delivery. HARRISON LOWMAN: Welcome to Hub Hits. I’m Harrison Lowman, Managing Editor of the Hub. Well, as Canada begins its slow thawing of its relationship with China, following years of that relationship being frozen solid with Carney and President Xi being expected to meet any day now, and the Chinese Communist Party meeting to plot out the next five years of China, there’s no better time to get a sense of what the Middle Kingdom is thinking. And for that, I’m joined by Charles Burton, a senior fellow at Synopsis cz, a Chinese focused think tank based in Prague, former diplomat at Canada’s Embassy in Beijing, and author of the forthcoming book the Beaver and the How China Outmaneuvered Canada’s Diplomacy, Security, and Sovereignty. Charles, thanks so much for joining us today. How are you? CHARLES BURTON: Good to speak with you. HARRISON LOWMAN: Okay, so Foreign Affairs Minister Anita Anand was in Beijing recently for what are called advanced discussions that could lead to that meeting between the folks behind me, Chinese President Xi Jinping and PM Carney before the end of the month. What are your betting odds, Charles? Is this meeting actually going to occur? CHARLES BURTON: Well, I mean, it’s not confirmed, and Mr. Xi has a lot going on in China with the fourth plenum of the Congress, where he’s under considerable challenge from the Chinese military. But let’s assume he goes and let’s assume he meets with Mr. Carney and he meets with Mr. Trump. Our main concern are the arbitrary imposition of tariffs on Canadian agricultural exports to China, specifically canola seeds, which are now essentially blocked from the Chinese market. That’s a significant move by China to leverage us by using economic coercion because there are 40,000 prairie farmers involved in the production of canola seeds. And it’s a $12 billion a year business. And last year, before China imposed these punitive tariffs, we sold over 4 billion to China. So it’s a big, big market. The Chinese did this in retaliation for our imposing 100% tariff on electric vehicles. The reason that we did that was that China heavily subsidizes these things, and so they would devastate our own market if they came into Canada. It’s a superior product, better battery technology, much cheaper. But the other concern which I expressed in Parliament is the potential for espionage by these machines. They’re similar to Huawei Telecoms. HARRISON LOWMAN: Charles, you wrote spot. You called them spy machines on wheels. Is this the case really? CHARLES BURTON: Well, China won’t let the Teslas go anywhere near sensitive sites. I mean, they gather terrific amount of information of where they go and on the people who are driving them. And there’s also like the neptech technology that we decided not to use for scanners in Canadian embassies and consulates around the world, they have software updates which come from the manufacturer. So if there was conflict between Canada and China, it’s possible that, conceivable under current conditions, that China could cripple them. So we’d really have to address those serious issues before it would be a good idea to bring them in. Not to speak of. I was on a radio show in the United States and mentioned that we were considering allowing Chinese EVs to take over our market. And an American commentator suggested that Mr. Trump might stop them at the border. So if you were heading to your condo in Florida, you know, you could walk in, but the car would have to stay on the Canadian side. I hope Mr. Trump wasn’t listening, because that might, in fact, give him an idea. But, you know, it’s still under consideration. We don’t know where it’s going to go. The issue really is in dealing with China. If we do get them to take off the tariffs on the canola, it doesn’t solve the problem, because next time China wants to leverage us to prevent us from, say, expelling agents of espionage or other concerns over Taiwan or the South China Sea or, you know, any number of things that, that we have going on with China, they can simply engage in this economic coercion on something else. They could declare our pulp and paper products are dumped, for example. So when you have a country that doesn’t respect the agreements and, and falsifies some reasons for barring Canadian products from the Chinese market, it’s sort of like whack a mole. You saw one, it’s quite likely that they would use another. If, particularly if, if they achieve their end to get the Chinese EVs into Canada by, by removing the tariffs on the canola, that would, I think, in my view, embolden them to do more. HARRISON LOWMAN: Charles do we have a sense of what Mr. Carney thinks about China? You recall Mr. Trudeau was pilloried for his remarks made before he became prime minister about how he envies the China’s ability to sort of get things, can get things done, because it’s an authoritarian country. We’ve seen Carney recently muse about how China’s a country run by engineers. Do we know, do we have clues from his past as to what he thinks about this country? CHARLES BURTON: Well, I mean, Mr. Carney has done extensive business in China over the years, and as from your photograph there, has met with Xi Jinping, and so clearly he thinks that it’s an opportunity for Canada. And I think there’s also a political perception there that the Prime Minister should be seen as trying to diversify our exports away from the United States in a situation where we’re seeing auto plants moving over to the States, thousands of workers out of work and economic decline due to the America first policies of Mr. Trump. The Prime Minister really wants to show that he’s doing something to try and, and address this issue. And expanding our trade relations with China is certainly a big part of it, but it doesn’t come without a cost. China’s not going to give us a promise of further access to their market unless we’re going to give them something back. And what they want back is what they refer to as some seek common ground while setting aside differences. So they don’t want us to pursue Chinese espionage, you know, the transfer of dual use military technologies to the Chinese state. They definitely don’t want us to enact the Foreign Influence Registry that came into law in Canada in June 2024 with Bill C70, which the government so far has not implemented. We don’t have a foreign influence Commissioner and we don’t have the, the registry because it requires an order and council appointment. And the government has not made that. There are just any number of things that China doesn’t want us to do. They’d like us to stop our freedom of navigation exercises in the South China Sea. They’d like us to cease our support for democratic Taiwan. I think it has even been broached by the Asia Pacific foundation that China might ask us to join the Belt and Road Initiative, which is a global infrastructure project where all the belts, you know, shipping facilities and roads, rail and so on, terminate in China and fulfill the economic portion of Mr. Xi’s overall program of what’s called the Community of the common destiny of mankind, which is a remaking of the world order precedented on his assumption that the United States is a power in decline and that the institutions that support the rules based international order, the WTO and the UN, will fade into irrelevance as China becomes the dominant civilizational force on the planet. I mean, that’s Mr. Xi’s idea. I’m not confident that he can realize it by 2050 as he proposes. But those are the foreign policy imperatives that China has publicly stated and I think we have to respect that. So where Canada fits into this, you know, China I think would like us to be a supplier of raw materials for China. They’d like access to our northern resources Their, you know, their idea of China being a near Arctic state and more and more present in the Northwest Passage, I think is a concern to us overall if China’s able to achieve their program and if the United States ceases to become interested in defending the interests of the west and Japan and Korea, as may be the case under Project 2025 that Mr. Trump seems to be following. HARRISON LOWMAN: You talk about Trump, Mr. Carney is no doubt responding to the fact that a lot of Canadians aren’t feeling so warm about Trump and the U.S. given his annexation threats he’s responding to. And I’m sure you saw this poll favor reviews of China from Canadians are now triple an all time low seen in 2021. Still negative, but they’re going towards the positive. And the fact that this is the second biggest economy in the world, from your diplomatic perch, Charles, is it that we shouldn’t, we can’t fully trust or engage with China until it’s a democracy. How should we treat it and how does it view, you know, trade and diplomacy? Does it see them as separate? CHARLES BURTON: Oh, no. I mean, China is an integrated party state, industrial military complex. And so they don’t do anything without looking at the whole, you know, it’s all dominated by the Chinese Communist Party, which some people say is like God invisible, but everywhere present. And so, you know, when we look at how China relates with Africa, countries that they’ve been investing in in the Belt and Road and supporting enabling dictators with surveillance technologies and so on, are typically countries that have favorable port facilities that China could use for future blue water, navy and submarines. So, you know, they’re working long term and in a comprehensive way. And I think within Canada, you see a similar process of China gradually attempting to achieve a comprehensive influence in our country. Not just the elections, but, you know, the attempts to subvert policymakers and to have investment in Canada that they can then leverage for their geostrategic purposes. You know, would we continue to deny China access to mining resources in the north if they would respond by punishing us economically? So I think the key here is that we shouldn’t be too dependent on the Chinese export market. So in the case of Canola, clearly we put too many, too much of our Canola into one market. And we should be trying to diversify so that when China engages in arbitrary tariff measures to leverage on other issues, that we can take the hit more readily. And I think that certainly that’s something that government is attempting to do. You know, we need to strengthen the Trans Pacific Partnership. We need to Strengthen our relations with like minded Asia Pacific countries. And of course, if there was a political change in China where China became more respectful of the rules based international order and you know, got more as a stakeholder in global affairs, I think that would be better for China and for Canada. But right now their government is involved in this idea of trying to redress the colonialism of Japan and the west by becoming the dominant power to which all of us will be subordinate. It’s not a realistic program, but it’s certainly one which takes up a lot of the energy in our, in our relations. And as you say, if China did become a democratic player, it would make it much easier for us to engage with them because we could be assured by independent rule of law and assurance that contractual relations would be maintained. HARRISON LOWMAN: The humiliation is what you often hear the Chinese say. Two final questions for you. You talk about leadership and power. China’s hosting its fourth plenum. All the senior officials from the CPP meeting to plot out the next five year plan that the country will take any rivals that Xi is facing. I note that he recently purged China’s number two general, fired numerous senior officials. Is this just par for the course or is there actually some sort of opposition afoot within that country? Or do we even know, given how restricted we are, what goes on there? CHARLES BURTON: Oh, it’s certainly not par for the course. I mean, of the three since the past three years, the three top uniform members of the Chinese Communist Party Central Military Commission have been removed. That’s very irregular. And a lot of the people in that nine, who are just the top nine, I mean, we’re talking hundreds of members of their factions who’ve been removed were people that had been appointed by Xi Jinping relatively recently. So I think one cannot but feel that there is concern in the military about the economic decline of China under Mr. Xi’s policies. And whether Mr. Xi is able to contain this or whether there’s a general erosion of the system which could lead to his removal from power remains to be seen. When that will be, I don’t know. But I mean, I’ve been predicting Mr. Xi’s demise for quite some time and eventually I’m going to be right because he is, after all, human.

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