Ottawa should stop clinging to any hope of deepening trade ties with China

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The scolding Prime Minister Justin Trudeau took from Chinese President Xi Jinping in Bali last week was great political theatre. But it was also a reminder of how far Mr. Trudeau has come from his wide-eyed dreams of cozy economic alliances with China when he began as Prime Minister – and how far Ottawa still has to go in figuring out how to deal with the cold reality of Beijing now.

The awkward exchange at the G20 conference in Indonesia occurred in the midst of the Prime Minister’s week-long tour of a region that his government sees, for good reason, as a critical component of Canada’s long-term trade growth. Ottawa is putting the finishing touches on an Indo-Pacific economic and foreign-policy strategy, for which Foreign Affairs Minister Mélanie Joly provided a preview in a speech just ahead of the trip – saying that we could expect the government to release a formal document within a month.

Canada should have had an Indo-Pacific strategy in place long before now, and everyone knows it. But China has always been central to any such strategy, and the Trudeau government has never been able to figure out how to deal with the country.

Just five years ago, Mr. Trudeau was in Beijing with hopes of launching talks toward a free-trade deal between the two countries. In retrospect, it spoke volumes when those discussions broke down over philosophical differences. Since then, our economic approach to China has been adrift – and has repeatedly crashed into the rocks.

It’s not just that China wasn’t interested in the progressive direction that Mr. Trudeau wanted to take trade talks, encompassing human rights, environment protections and labour standards. (That was no surprise.) It turns out that China isn’t interested in playing nice at all. It waged a massive trade war with the United States. It routinely attacked Canadian exports with tariffs. It practised hostage diplomacy with two Canadian citizens.

There is, obviously, no going back. We’re not buddies, and it shows.

On one level, the spat in Bali between Mr. Trudeau and Mr. Xi might have been a public display of diplomatic one-upmanship. Mr. Xi didn’t grant Mr. Trudeau a formal sit-down meeting at the event, a conspicuous snub. Mr. Trudeau’s response was to approach him for a brief informal talk – and then leak the contents of that conversation to the media. Mr. Xi reacted by berating Mr. Trudeau in front of cameras; Mr. Trudeau looked unmoved. As I said, great theatre.

Nevertheless, the whole episode was a sign that Canada still hasn’t grasped how to go forward with China – how to balance defending our ideals with the massive discrepancy in economic and political power.

Ms. Joly’s speech on the Indo-Pacific strategy – which had a strong emphasis on China – attempted to articulate the general principles that her government has in mind. The basic idea seems to be of a useful trading partner that is no friend, one we engage with but maintain a prudent distance.

“We will challenge China when we ought to. We will co-operate with China when we must,” Ms. Joly said.

“What I would like to say to Canadians doing business in and with China: you need to be clear-eyed. The decisions you take as businesspeople are your own. As Canada’s top diplomat, my job is to tell you that there are geopolitical risks linked to doing business with the country.”

She said the government plans to help businesses diversify across the region to “mitigate” those risks. She also talked about adding a “national economic security lens” with respect to Chinese investments in Canada, particularly in the critical minerals sector.

And yet, one can’t help but wonder if the Trudeau government – or, at least, factions within it – doesn’t still cling to hopes that Canada might discover a path to nurture and deepen its trade ties with China.

While the Deputy Prime Minister and Finance Minister, Chrystia Freeland, has talked at length about pursuing “friend-shoring” – focusing trade efforts on countries that share Canada’s values and interests – the term appears to be absent from the Prime Minister’s vocabulary. Similarly, Ms. Joly dodged the phrase in sketching the outlines of the upcoming regional strategy.

If the government’s economic approach includes redirecting our trade away from China and to democratically elected allies, and/or cutting Chinese links out of key supply chains, there are some very important members of that government – starting with the Prime Minister – who are not prepared to say so.

Perhaps Mr. Trudeau isn’t nearly as sold on friend-sharing as Ms. Freeland is. Or perhaps he and Ms. Joly – who also went on the Asia trip – are just being diplomatic. No point in going to China’s backyard and agitating an already tense relationship by proclaiming that you’d rather find someone else with whom to do business.

But the Chinese leadership has shown that no matter how much Canada wants to pull its punches and keep lines of communication open, it isn’t that interested in what we have to say, and doesn’t much like it when we talk about China at all.

If Canada wants to have an Indo-Pacific strategy with teeth, our government needs to fully accept that reality. We’ve spent too many years waffling and hoping.