The History of the Relationship between China and Canada - Case Study Example

ESSAY OUTLINE THESIS: This paper will seek to examine the rise of China and its political and economic relations with Canada. It will further argue that to date, Canada has lacked the necessary strategic policies to forge positive economic and political relations with China. The paper will be organized in the following sections: CHINA AND CANADA: A HISTORICAL RELATIONSHIP: In this section, I will examine the history of the relationship between China and Canada to provide background for the rest of the paper. CHINA’S GROWING ECONOMY I will examine the growth of China’s economy including the products and services that currently fuel China’s economy. IMPACT ON CANADA This section will examine how China’s economy is linked to Canada’s as well as the impact that it has on the Canadian economy. CANADA’S FOREIGN RELATIONS STRATEGY ON CHINA In this section, I will address the question posed in my thesis and examine Canada’s current economic and political relations with China. RECOMMENDATIONS & FUTURE OUTLOOK: CANADA-CHINA RELATIONS Based on my research and the opinion of experts, I will provide an analysis of the necessary steps to improve Canada-China relations. ANNOTED BIBLIOGRAPHY Dobson, Wendy, “Canada had to rise to the Chinese challenge,” National Post 15 September 2004: 1-2 Dobson argues that Canada requires a comprehensive strategy for meeting the challenge of China’s surging growth. Evans, Paul, “Canada, meet global China,” International Journal Spring 2006: 283-297 Evans provides background on the relationship of China and Canada and provides recommendations for improving Canada-China relations. Jiang, Wendy, “Harper’s China non-policy,” Ottawa Citizen 28 May 2008: 1-3 Jiang discusses the danger in not having a China policy and examines the role of the Harper government in worsening Canada-China relations. Tiagi, Raaj & Lu Zhou, “Canada’s Economic Relations with China,” The Fraser Institute February 2009: 1-22. Tiagi and Zhou examine the emergence of China as a major economic player and China’s role in the global economy. York, Geoffrey & Alan Freeman, “Cooling Relationship between China and Canada,” Globe and Mail 9 November 2007: 1-2 York and Freeman discuss the Harper’s government strategy for relations with China and in particular the cooling of relations between the two countries. PERSONAL WORK SCHEDULE I will first conduct the research and then analyse the information to formulate my arguments. THE RISE OF CHINA Globalization has created a world in which we are all intincrately connected. Improvements in transportation and communications, has led to an increasingly global economy, with countries developing international trade and foreign investment relations1. China has emerged as a global economic power in the past decade and is predicted to continue to dominate the world economy into the future. Traditional relations between China and Canada have been quite good, with a large number of Chinese immigrants calling Canada home. However, in the recent past, these relations have soured somewhat, with the Harper government failing to have a comprehensive and strategic “China strategy”.2 This paper will seek to examine the rise of China and its political and economic relations with Canada. It will further argue that to date, Canada has lacked the necessary strategic policies to forge positive economic and political relations with China. CHINA AND CANADA: A HISTORICAL RELATIONSHIP The relationship between China and Canada dates back to the early 19th century, when Chinese labourers immigrated to Canada to build the railroads. This relationship continued and in the 1960s, Prime Minister John Diefenbaker promoted wheat sales on credit to communist China. 3 Prime Minister Trudeau furthered these first economic ties in 1970 when he first visited the country. This visit was followed by a trade agreement in 1973, and the establishment of the Canada-China Trade Council. Since that time, China and Canada have signed numerous “Agreements and Memorandum of Understanding about trade, investment, insurance, tax environment and criminal matters.”4 Canada has been home to hundreds of thousands of Chinese immigrants. Globalization has played an important role in bridging the cultural gap between nations and encouraging diplomacy and international trade agreements. In recent years China’s economy has flourished along with its impact on the world economy. The result of this economic boom has been felt throughout the world. China, a historically closed nation, has opened its doors to the outside in certain domains, including the supply chains, production networks and foreign investment. According to Paul Evans, “what we consume, what we produce, and how we produce it have all entered a globalized world in which China is suddenly at the cutting edge.”5 CHINA’S GROWING ECONOMY The manufacturing industry in China currently produces high-end technology through low-wage labour. According to Evans, “in the course of a generation, it has emerged as the shop floor of the world by crafting a production system that fuses high-end technology with low-wage, labour intensive activity, cut throat domestic competition; a reliable, docile, and capable industrial workforce; utilization of huge sums of foreign investment and technology; and the new appetites for a billion domestic consumers.”6 Not only has China dominated the market for household electronics, toys, textiles and clothing, it has also placed itself as a leading producer of higher-end assembly and export items including trucks, aircraft, ships, telecommunication equipment, and machinery.7 IMPACT ON CANADA The growth of the Chinese economy impacts Canada’s domestic and internal relations in many ways. China’s manufacturing industry has reduced the price of consumer goods to the point that Canadian manufacturers find it difficult to compete. According to Evans: Canadian manufacturers are caught in the pincers of competing with the dread ‘China price’ at the same time the cost of their inputs area rising because of Chinese demand. Canada is losing manufacturing jobs. To survive, manufacturers need to compete with Chinese producers at the same time they cooperate with them in benefiting from supply China innovation.8 Over the past 25 years, China’s economy has grown more than nine percent. China’s growing economy and large population has led to its increased demand for energy products. This has resulted in higher prices for energy and natural resources in Canada. Further, Canada’s banking industry and in particular mortgage and interest rates are tied to China’s purchase of US securities.9 In essence, Canada’s economy like many of its neighbours is strongly linked to China’s. China is currently Canada’s second largest trading partner, followed by the U.S. In the US, China will soon take over from Mexico as America’s second largest trading partner and could potentially replace Canada in the number one spot.10 CANADA’S FOREIGN RELATIONS STRATEGY ON CHINA Canada has recognized the growing importance of positive relations with China. Prominent media outlets, such as the Globe and Mail have expanded their news services in China, educational institutions are creating strategies to recruit more Chinese students and provincial and municipal leaders are traveling to China at unprecedented rates.11 However, to date there has not been a comprehensive federal strategy for dealing with the rise of China.12 The fact is that China’s rise has and will continue to put pressure on the Canadian manufacturing industry; reduce the price of consumer goods and increase the price of commodities (including oil). 13 In 2005, the Martin government made some attempt at furthering a strategic partnership with China by announcement new agreements that will “deepen cooperation in the areas of transportation, food safety, health sciences and nuclear energy, and a joint declaration on science and technology that includes a program of collaborative research on climate change and sustainable energy.”14 However, since the Harper government took office, very little has been accomplished by way of strengthening bilateral China-Canada relations. According to Wenran Jiang, acting director of the China Institute at eh University of Alberta, “Canada has removed Beijing from its foreign policy priority list; while new leaders from Germany to Japan put summit diplomacy with the Chinese leaders as an indispensable part of their travel itinerary.”15 He argues that Canada has lost its foothold in China in terms of its proportion of trade and investment and blames this largely on the Harper government “making grand, but largely self-congratulatory, moral statements regarding China’s human rights record [while] not implementing a single tangible project to advance human rights and democracy in that country.”16 According to Jiang, Canada’ continues to lose its influence in China and must put national interests over and above party politics. RECOMMENDATIONS & FUTURE OUTLOOK: CANADA-CHINA RELATIONS In order to develop a national strategy for engaging China, Canada must make significant changes to the way it views the relationship between trade and investment. Traditionally, Canada has promoted exports and encouraged foreign investment from China; however, according to Wendy Dobson of the Financial Post, this is outdated. In order to “participate in China’s expert success, [Canada] must invest there, both to maintain cost competitiveness and to participate in global production chains.”17 She also cautions about the possibility that Canada could be pushed out of the US market by lower-cost Chinese products. Canada will continue to face stiff competition in imports from Chinese based companies because “comparative advantage in most stand-technology labour intensive production has now shifted there.”18 The solution, according to Dobson, is investing in China, increasing sophistication of what is produced in Canada and using knowledge and skills that are found more intensively here. Further, “producers of and investors in higher value added goods and services that to no compete directly with China’s labour-intensive offerings should identify market niches or participate in global production chains in order to market there.”19 WORKS CITED Dobson, Wendy, “Canada had to rise to the Chinese challenge,” National Post 15 September 2004: 1-2 Evans, Paul, “Canada, meet global China,” International Journal Spring 2006: 283-297 Jiang, Wendy, “Harper’s China non-policy,” Ottawa Citizen 28 May 2008: 1-3 Tiagi, Raaj & Lu Zhou, “Canada’s Economic Relations with China,” The Fraser Institute February 2009: 1-22 York, Geoffrey & Alan Freeman, “Cooling Relationship between China and Canada,” Globe and Mail 9 November 2007: 1-2 Read More