Mr. Martin goes to Beijing

Dec 11th, 2004 | By | Category: Countries of the World

The text of Paul Martin’s December 6 speech to the Canada-China Business Council in Toronto has given Canadians some initial glimpse of their federal government’s emerging thinking on the new Chinese role in Canadian development. And with the US magazine Business Week‘s recent talk about the “massive shift in economic power” towards China now underway, this is certainly a bigger issue than the Romanian stripper who worked on immigration minister Judy Sgro’s election campaign – or most other subjects lately debated in Parliament at Ottawa.

The state-owned China Minmetals Corp.’s recent proposal to buy the venerable Canadian resource sector firm Noranda Inc. has put fresh pressure on the Martin government to come up with some kind of more organized plans for dealing with China’s rising economic power. But the issue generally has been bubbling on assorted back burners for a while now. To take just one case in point noted by Prime Minister Martin, since the middle of the 1980s as much as 5% of the population of Hong Kong has picked up and moved to Canada. All told, in “our multi-ethnic population” today “Canadians of Chinese origin number more than one million.”

Martin’s speech did not advance any bold new strategic concepts, or suggest any imminent big practical action. It just reviewed various obvious enough aspects of the broader issue, and noted a few times that Prime Minister Martin and international trade minister Jim Peterson will “be travelling to China in January, to meet with President Hu, Premier Wen and other senior leaders – to engage them in discussions about our bilateral and multilateral relations, to talk about our partnership as nations and how it can grow and be enriched on all levels.”

However, Paul Martin and his speech writers have a certain talent for high-sounding progressive rhetoric about such things as the “New Multilateralism” in the evolving global village. This was ably enough trotted out, in a suitably restrained and modest way, in the prime minister’s December 6 remarks to the Canada-China Business Council. And it already seems clear that Paul Martin himself is a rather enthusiastic advocate of the new opportunities which the rising China could offer to both hard-working Canadians, and the economic development of their continuing independent country.

There is apparently no doubt in Martin’s mind that “tectonic shifts” are now “underway beneath the global economic terrain.” In the 21st century “power will be distributed very differently than it has been during the past fifty years. Countries such as China and India, which together represent more than a third of world”s people, will play increasingly pivotal roles on the global stage roles that I certainly could not have imagined when I first visited China in 1972, during the waning years of the Cultural Revolution … No longer can China be considered simply an emerging market; it has established itself as a world power.”

Today China’s “young people are smart, well-educated and driven.” Paul Martin and his cabinet understand that to navigate “the profound change that is coming … we as a government … have to focus on making sure our businesses have the capacity and the ability to compete. This means competitive taxes. It also means an education system second to none … Our agenda as a government is broad …but in everything we do we are guided by one imperative: ensuring that Canadians and their values prosper now and in the future … how we react to the emergence of China as a global force will go a long way to determining whether we succeed.”

If “Canada is to maximize its share of the jobs in the new world,” it will need, in the prime minister’s view, “an innovation- and research-friendly environment next to none.” And it will have to draw on such things as the “creative arts, technology-driven manufacturing and many areas of traditional Canadian expertise, ranging from transportation and communications to educational services and agriculture.”

At the same time, Prime Minister Martin is not afraid of China’s special interest in Canada’s traditional natural resource wealth. It was once “popular to say that the age of commodity-driven growth was a phenomenon of the past. Just as building wooden ships for the Royal Navy could no longer sustain our shipyards after the mid-nineteenth century … Canadian resource sectors would be marginalized in the 21st century economy. Well, think again.”

As “we have seen” already, in China Minmetals’ interest in purchasing Noranda, e.g., “our resource firms will become attractive to companies in Asia. In fact, given its accumulated hard currency reserves, China is likely to be an increasing source of capital as it seeks to secure the resources the Chinese people will need. In determining whether acquisitions of this nature will be welcomed in Canada, we will be guided by the imperative of ensuring that they are of significant benefit to Canada both domestically and in terms of our international economic reach.”

Even here, “the real opportunity is the potential to market abroad Canadian know-how our brain power and expertise … Today, Canadians are active in both the South China Sea and in the north-east of China in the energy sector because of the expertise that our country has developed in petroleum recovery. That same level of expertise exists among those in our mining sector … we benefit as a nation when we are able to sell not only the resources themselves but our resource sector management and our technical ability.”

Ultimately, we must also “commit ourselves to competing globally in high-level manufacturing and services.” There is “such opportunity here, and Canada is well-placed to seize it. We would do well to emulate Japan, whose economic resurgence owes much to the successful role played by its advanced economic sectors within the context of China’s growth.”

Paul Martin’s government understands as well that Canadians and others have some concerns about just what China is finally going to grow into in the new global village. “As China becomes increasingly influential in economic terms, as it emerges as a global player,” the prime minister told the Canada-China Business Council in Toronto, “it will find many new opportunities but also new obligations.” (For very close students of traditional Canadian economic literature, the language here might also recall Harold Innis’s pronouncement that “an empire has its obligations as well as it opportunities,” in a long-ago discussion of Ontario’s economic growth inside Canada, during the first half of the 20th century.)

When Mr. Martin and Mr. Peterson visit China this coming January, they “will be continuing” to “engage the Chinese government … through dialogue and practical cooperation, on human rights issues.” They “will be working with the Chinese on such issues as investment protection, full implementation of WTO commitments, the development of a more transparent legal system and the full application of the rule of law in commercial disputes.” The prime minister “will pursue with President Hu and Premier Wen discussions on a range of issues, including UN reform, international public health, the environment, and the fight against terrorism.”

At the same time again, Prime Minister Martin concluded his December 6 speech on a rather more buoyant note: “Increasingly, as one reads American and European business periodicals, one sees the rise of China referred to as equal parts prospect and hazard. We have a different view in Canada … Given our population, given the small size of our domestic market, given our history as an exporting nation, when we look out at the shifting global landscape, all we should see is opportunity. So long as we continue to be among the world”s best-educated populations, so long as we strive to improve productivity and capitalize on our ingenuity, there is remarkable potential for us as new markets open up, as new nations rise, as new people acquire the means by which to participate more fully in the global economy.”

That is probably the right note to end on, for the time being. And it all does sound quite forward-looking and even vaguely inspiring – as Paul Martin can sometimes seem to be on such occasions. But it is all still inevitably very vague and general too, of course. It is still very early days for both the emerging new Canada-China relationship and the new Liberal minority government in Ottawa elected last June. Just how it may all work out practically, down on the ground in both countries and beyond, in the fullness of time, remains very much to be seen.

Meanwhile, it is still true that Canada’s largest trading and broad economic and cultural relationship by far is with the elephant next door in the USA – and no doubt always will be. China, and other new rising parts of Asia, may help to diversify this inevitable intimate relationship in the 21st century, and play a balancing role somewhat like that once played by the global trading framework of the now fallen British empire. And that could come to benefit all of North America, in various healthy and strengthening ways.

Whatever else, the “tectonic shifts” now “underway beneath the global economic terrain” are bound to prove quite fascinating. For the moment Canadians can only await further reports of the next step along the way of what is probably also bound to be quite a long journey, in the new year this coming January, when Mr. Martin and Mr. Peterson go to Beijing.

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