Amid the growing debate over China’s influence in this country, some 200 delegates attended the inaugural Pacific Finance and Trade Summit in Vancouver on June 16 to promote Canada as a trading and clearing hub for the Chinese renminbi (RMB) currency.
News soon filtered in that an Ontario cabinet minister, in promoting increased trade ties with China, had or has been under surveillance for at least five years for being “too close” to Beijing. “Treason” and “espionage” were mentioned in a sensational Globe and Mail story about Michael Chan, a China-born naturalized citizen who has risen within Ontario’s Liberal Party government. But no charges have been laid, and two days after the June 16 story, the Federal Justice Minister punctured the newspaper’s claim that he had confirmed Chan was under investigation.
Nevertheless, given the prevailing anti-China sentiment in Canada’s newsrooms, the centrist Globe found rare support from its right-wing National Post rival. Diane Francis, a noted China critic, added to the Globe’s narrative by stating that Canada could suffer “long-term pain” if its business elite continues to cozy up to Beijing. She also suggested that Chinese migrants are really aiding Beijing’s takeover of Canada’s natural resources and hurting less well-off citizens by inflating real estate prices.
Earlier, in a three-part series on booming Richmond city, the Vancouver Sun’s Douglas Todd reprised some of his criticisms about Chinese migrants: ethnic enclaves, proliferation of Chinese language signs, rising housing unaffordability and weakening community cohesion.
Long suspicious of China, The Tyee, a left-leaning online publication, weighed in with a new critical report on how Prime Minister Stephen Harper sold Canada off to Beijing through the Foreign Investment Promotion and Protection Agreement (FIPA).
Rarely has the breadth of Canada’s ideological media divide been so united on a single topic: the fear of China and things Chinese.
The curse of interesting times
While both sides have matching economic imperatives — China needs natural resources and services, Canada needs markets — domestic politics in both countries along with strained interactions between new Chinese migrants and Canadians are having an unpredictable impact on bilateral relations.
With Canada’s economy veering towards recession amid the prolonged oil-and-gas price collapse, its leaders recognize the need for expanded long-term economic ties with China and Asia to reduce dependence on the U.S.
Among those at the June 16 event were China’s Vancouver-based Consul General Liu Fei, B.C.’s Trade Minister Teresa Wat, Finance Minister Michael De Jong, two of his predecessors, former finance ministers from Alberta and Ontario, as well as representatives from some of the world’s largest banks. Four of those banks are from China, led by the Industrial and Commercial Bank of China (ICBC), which has more than US$3 trillion in assets and the role of clearing RMB trades for the Americas.
In over three years as consul general, Liu said she has travelled across B.C. to meet with the mayors and business people of more than 30 cities and towns who are eager to increase trade ties with China.
Despite bilateral trade reaching a record (C$77.43 billion) last year, she said both countries are fulfilling a mere fraction of their export potential. Canada has room to substantially increase export to China’s 1.4 billion people after selling just C$18.8 billion worth of merchandise last year.
Colin Hansen, a former B.C. finance minister who now heads up AdvantageBC, describes the RMB hub as a huge opportunity for Canada to create new business to serve companies throughout the Americas who are planning to or are already doing business with China.
With China globalizing its currency, Hansen said Canada with its strong physical, banking and legal infrastructure and stable political system is well-positioned to succeed as a RMB hub. Vancouver and Toronto have the added strength of their diverse populations, in particular their ready pool of Canadians fluent in English, Mandarin and Cantonese.
Range of fears
But not everyone wants Canada to become China’s currency booster, or have more Mandarin or Cantonese speakers in the population mix.
Disregarding their country’s gloomy economic outlook, 49 per cent of Canadians recently told the Asia Pacific Foundation of Canada (APFC) they don’t want any investments from China, citing a range of fears from loss of control of strategic assets, to environmental, health, safety, security and labour challenges. Politically, the RMB hub faces a hard sell as Canadians are becoming increasingly negative towards their country’s second largest trade partner.
Canada’s mainstream media have played to the public’s anti-China mood by highlighting Beijing’s territorial bullying of its neighbours, its disastrous environmental record, and human rights abuses. The reports also focus on how new Chinese migrants in Greater Vancouver and Toronto are not integrating well due to their lack of English or French language fluency.
Canada’s mainstream media have played to the public’s anti-China mood by highlighting Beijing’s territorial bullying of its neighbours, its disastrous environmental record, and human rights abuses.
Some 64 per cent of Vancouver residents blame Chinese-led foreign buying for causing the city’s rising real estate cost, according to a Angus Reid survey. The media has focused on Chinese buying of expensive high-end homes, but have hardly investigated other causes of Vancouver’s rising housing unaffordability.
Also, less widely reported is Chinese contribution in boosting the economies of many countries around the world, including the revival of Canada’s previously depressed resource towns.
The spread of Chinese influence
Richmond city stands out as the symbol of what’s not to like when Chinese migrants and money become dominant, in particular in the proliferation of Chinese language signs in the downtown core.
“If all they’re bringing in is money, they won’t become a true part of Canada. The new migrants must make an effort to learn English or French,” said Stewart Beck, the APFC’s president and CEO, in an interview.
Canadian suspicions have also been aroused by Beijing’s eagerness to “splash the cash”. In 2012, state-owned China National Oil Corp (CNOOC) paid a very generous 61 per cent premium of more than C$15.1 billion for a medium-sized oil and gas company with little growth prospects.
That record deal for both countries has ended badly for the acquired Nexen Inc., leaving behind a trail of job cuts, broken promises and unfulfilled expectations. With that deal’s failings still unfolding, many wonder if the potential benefits of the RMB hub project could just be as over-stated, and its problems under-rated.
“If all they’re bringing in is money, they won’t become a true part of Canada. The new migrants must make an effort to learn English or French,” said Stewart Beck, the APFC’s president and CEO, in an interview.
Missing the big story
Despite his political aversion towards China, Prime Minister Harper signed two major agreements with Beijing last year: FIPA and the RMB hub deal.
There are concerns the RMB hub could be used for remitting “funny money” amid reports that Vancouver is a popular destination for criminals and corrupt officials fleeing China.
However, Jimmy Mitchell, AdvantageBC’s vice president for business development, sees the RMB hub as aiming to promote and facilitate legal and legitimate trade between China and the Americas.
“Given that the RMB hub represents a new channel and a new relationship to handle an unprecedented amount of money, we will focus on building the trust and processes to make it work,” he said.
By promoting the RMB hub and FIPA, Canada will be helping to expand China’s influence in the region. In targeting Chan for allegedly doing Beijing’s bidding, the Globe and Mail has clearly missed the bigger stories.
Ng Weng Hoong is a Vancouver writer who has been covering energy and economic issues in Asia and the Middle East for over three decades.
