Standing Up to the Bully: Can O'Toole Solve the China Problem?

Canada's relationship with China is in freefall. It's not just the two Michaels: there's the repression of the Uyghurs, unfair trade practices, industrial espionage, human rights violations in Hong Kong, and lots more. If Erin O'Toole is right, China is “the geopolitical challenge of our times.” The question is, does he – or anyone else – have a plan that can solve it?The news is not all bad. China is Canada's second largest trading partner after the US and a key market for a wide variety of exports, from oil and gas to canola and seafood. And despite the pandemic, business is booming. China accounted for almost seven per cent of Canada's total trade in 2020.That may seem small by comparison with the US (75 per cent in 2019) but over the last two decades Canadian businesses have worked hard to expand trade with China and, as the chart below shows, they've made remarkable progress:

The future is promising, with new opportunities for technology and services of all kinds. Canadian businesses have a lot at stake in the relationship and want it to work. But the political tensions are rising – and not just in Canada.

According to Pew, Canada's allies are also anxious. They too resent the Chinese government's indifference to the Rule of Law, its abuse of human rights, and its record on climate change. Still, as John Ivison notes, most aren't looking to punish, isolate or change China, so much as limit the space for open conflict with it. In this view, the best approach is for countries like the UK, France, or Canada is to cooperate with China where interests overlap and sever links where they do not. Versions of that view are widely shared in Canada (see here or here or here), but Conservative leader Erin O'Toole wants to go further.O'Toole believes democracy is under siege and as prime minister he'd work with Canada's allies to impose Magnitsky sanctions on China for its transgressions. (This would freeze Chinese assets in Canada.) Getting China to change, he says, calls for “strong leadership,” someone who is willing to “stand up” to Chinese President Xi Jinping.This should raise some eyebrows. Canadians know how Xi reacted to the detainment of Huawei executive Meng Wanzhou. What if Ottawa now starts freezing China's assets? What then?At a minimum, Xi will respond by freezing Canadian assets. Will O'Toole then up the ante, say, by telling western farmers that they can't sell their canola or beef to China?And where will it stop? Given the long list of grievances, tensions could quickly escalate. For example, O'Toole is rightly concerned about China's use of high-tech exports to gather intelligence and he insists that it end.But Canada and its allies also export high-tech and services to China. If it refuses to change, will he shut down this line of trade? He never says.As closer scrutiny shows, O'Toole studiously avoids the issue of escalation or retaliation. In a recent scrum, for example, he was asked to comment on how these challenges to China are impacting on Canadian farmers. Instead, he chose to focus on the need to protect human rights.Human rights are certainly important, but so are farmers' crops. If O'Toole wants Canada to confront China, he should say where his plan leads and what the costs and benefits might be. In this case, escalation and retaliation are likely consequences.In fact, O'Toole is really making a pitch, rather than offering a plan. When he suggests that strong leadership will bring Beijing to heel, and that Canada's allies will be there to support him, the reassuring message is that Canada can put pressure on China without risk of reprisal – that someone just needs to “stare the bully down.”Canadians should be cautious. Aggressive action by Canada and its allies would almost certainly mean an equally aggressive response from China. And that's how things get out of control.This is not a call for complacency or a denial of the need for action. However, Canadians should be careful to distinguish between a pitch and a plan. O'Toole is right to be angry at China but oversimplified solutions are unhelpful.China is a pivotal force on most of the important issues facing Canada and the world today – trade, environment, global public health, and security. This makes its increasingly bad behaviour a serious problem.There is much agreement among Canada's allies that multilateralism is an essential part of a solution, but most are not looking to alienate or isolate China. There is too much at stake.Globalization has also changed things. In this hyperconnected environment, it is difficult to work together to apply pressure without harming one another's interests.Canadians need a plan that is forward-looking rather than backward-looking, subtle rather than confrontational – and that calls for a thoughtful leader, not a strong one.Dr. Don Lenihan is Senior Associate at the Institute on Governance and an internationally recognized expert on public engagement, governance, and policy development. For more, visit his website at: www.middlegroundengagement.comAndrew Balfour is Managing Partner at Rubicon Strategy in Ottawa.