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In July, when an international court ruled that China's incursions in the South China Sea were illegal, it took Stéphane Dion a full nine days to react. But instead of strongly rebuking China's actions, as most Western powers had, Canada's Foreign Affairs Minister was careful not to take sides.

"Whether one agrees or not with the ruling, Canada believes that the parties should comply with it," Mr. Dion said. "All parties should seize this opportunity as a stepping stone to renewed efforts to peacefully manage and resolve their disputes, in accordance with international law."

If it sounded like Mr. Dion was going easy on China, it's because he was. The Permanent Court of Arbitration in The Hague was categorical in faulting China for its lawless behaviour in its territorial dispute with the Philippines and for the environmental harm it had inflicted on the region. But Canadians may have to get used to this of kid-gloves treatment as Prime Minister Justin Trudeau aims to reset Canada-China relations, starting with his first Chinese junket this week.

Related: What Trudeau wants and risks with visit to China

While most observers will be watching to see how forcefully Mr. Trudeau insists on talking about China's human-rights record with President Xi Jinping, the truth is that his influence in this area is next to nil. That does not mean Mr. Trudeau should not speak out against China's abuses, but Canadians have to be realistic about how much good such remonstrances will actually do.

Mr. Xi is an authoritarian leader who makes his recent predecessors look practically soft. He has fanned Chinese nationalism and embarked on an upgrading of China's military might that he intends to use to in his country's quest for regional, if not hemispheric, hegemony. This has put China on a collision course with the United States and its Asian friends, creating awkward issues for U.S. allies such as Canada that seek more Chinese investment and trade.

No country is grappling with this dicey new reality more than Australia, which now depends more on trade with China than any other country. As Australian Foreign Minister Julie Bishop recently noted in an opinion column in The Washington Post: "This is the first time in our history that our No. 1 trading partner is not an ally."

Australia has an eight-month-old free-trade agreement with China (note to Mr. Trudeau: It took more than 10 years to negotiate) but that did not stop Treasurer Scott Morrison from this month blocking a Chinese state-owned company from acquiring a majority stake in the country's biggest electricity distributor in partnership with a Hong Kong firm. "During the review process, national-security issues were identified in critical power and communications services that Ausgrid provides to businesses and government," Mr. Morrison said in stopping the Chinese bid.

Chinese officials reacted in a typically angry and offended fashion. But as Chinese state-owned companies spread their tentacles across the planet to acquire infrastructure, resources and technology, Western governments must increasingly weigh their desire for foreign investment against the national security concerns raised by Chinese ownership of critical assets.

Related: To win with Beijing, Trudeau must play both softball and hardball

What would happen, for example, if Australia surrendered control of its electricity grid to China and then backed the United States in a military dispute in South China Sea? China could turn out the lights and cripple Australia's economy. It's hardly a far-fetched scenario.

Similar concerns were behind British Prime Minister Theresa May's move last month to defer approval of the massive Hinkley Point nuclear power project that would be one-third held by state-owned China General Nuclear. Ms. May's joint chief of staff had previously warned that CGN could "build weaknesses into computer systems which will allow them to shut down Britain's electricity production at will." Indeed, intelligence agencies across the West generally take a dim view of increased Chinese investment, given the country's notorious penchant for cyberespionage and hacking.

Canada's oil patch craves Chinese capital, which has slowed to a trickle since the former Conservative government closed the door on new investments by Chinese state-owned enterprises following the 2012 takeover of Nexen Energy. Mr. Trudeau is disposed to reopening it, as much for economic as political reasons.

The next time China goes shopping in Canada, however, it might not be for our natural resources but for our technology companies or energy infrastructure. Canadian leaders will need to weigh their desire to strengthen our economic ties with China against our broader national-security interests.

Will Mr. Trudeau, who seems to take more benign view of China than most Western leaders, be able to say no?

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