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The corporate room had already been decked in congratulatory banners, ready for the final pen strokes on an agreement intended to bring together a Canadian company and a Chinese state-owned firm to develop projects that could one day be worth hundreds of millions of dollars.

Then, 21 hours before the paperwork was supposed to be finalized, the founder of the Canadian company received a message.

”Because of what has recently happened between Canada and China with the Huawei company, and considering the political factors and our status as a state-owned company, we have decided to postpone the signing ceremony,” the Chinese partner wrote in a message seen by The Globe and Mail.

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“I think it will still happen,” said the Canadian founder, whose name The Globe is withholding because he still hopes to complete the deal, and fears reprisal for speaking out.

“But if the government says you’re finished, then it’s all gone.”

Canadians have grown accustomed to a warm reception in a country that for still lionizes Norman Bethune, the doctor who helped Mao’s Communists.

But China’s detention of Canadians Michael Kovrig and Michael Spavor following the arrest in Canada of Meng Wanzhou, the chief financial officer of telecommunications giant Huawei, has brought a swell of new feelings in Beijing, Shanghai and cities farther afield: uncertainty, nervousness, even fear.

Chinese police patrol in front of the Canadian embassy in Beijing on December 13, 2018.


Commentaries in Chinese state media have called Ms. Meng’s arrest a “kidnapping” and a “hostage-taking,” and social media has coursed with fury at Canada, after it arrested the Huawei executive at the request of the United States, which alleges she committed fraud in 2013 by misleading U.S financial institutions about Huawei’s control of a company operating in Iran, putting the banks at risk of violating U.S. sanctions.

The ill sentiment has seeped into offices in China, where some Canadians say their Chinese colleagues have told them they support their country taking retribution against Canada, reflecting a sentiment that has come from the country’s top leadership. On Tuesday, Chinese Foreign Minister Wang Yi said China’s “government will not sit back in silence amid bullying that recklessly violates the legitimate rights and interests of Chinese citizens.”

On Thursday, the Chinese Foreign Ministry confirmed that both Mr. Kovrig and Mr. Spavor were being investigated by the state security apparatus for endangering national security, and were subject to “compulsory measures,” a term often used to describe detention without formal charges, which can last for six months.

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“I’m seeing a lot of nationalism. I’m seeing a lot of China versus the world,” said Michael Yen, a business consultant who has lived in the country for three years. He usually wears a maple-leaf shirt a few times a week. This week, he felt it was better to leave the Canadian colours on the shelf.

“I don’t like the fact that they will target certain nations and kind of bully those people,” he said.

The federal government has given reassurances that relations with China remain largely as usual. Despite those remarks, Tourism Minister Mélanie Joly announced Friday she won’t go to China to mark the end of a special year of tourism exchanges. The decision puts the breaks on a major Sino-Canadian initiative meant to deepen ties between the countries. Top forestry executives are in Beijing this week.

But at least one Canadian government representative in China has privately warned Canadians to be exceedingly cautious, particularly if they are already in the midst of difficulties with Chinese business partners.

In Shanghai, China’s commercial capital, fear of retribution has led some Canadian executives to take early Christmas vacations, two people said. At the offices of one major Canadian company in China, employees were told to submit a list of emergency contacts in Canada and China. The Canadian embassy in Beijing itself has been the target of at least one bomb threat posted to its Twitter-like Weibo account, while Chinese social media has been flooded with threats of economic reprisal against Canada Goose, the clothing brand that recently launched a major expansion in China.

“Who knows what’s possible here?” said Mark Simon, who has lived in China for 12 years and is among the most visible members of the Canadian hockey community in Beijing.

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Until there is some resolution, he feels “a tad less proud, and safe, with a Canadian flag on me here.”

On Thursday, a Canadian executive in Beijing breathed a sigh of relief when he picked up a call from an unfamiliar number, only to find a Globe reporter on the line.

“I thought you might be the Public Security Bureau,” he said, asking not to be identified out of concern for his safety. He had a flash of anxiety when he returned to China this week, wondering if his Canadian passport would be flagged. It wasn’t, but it was the first time in 20 years he could recall feeling that way.

“Because I look at the profile of these two people” – the detained Canadians – “and they’re irrelevant people, like me,” he said. “They’re not the head of a big organization, like a big bank or a big airline.“

Indeed, China’s detention of Mr. Spavor, who built a business bringing tourists and sports groups to North Korea, suggests “any Canadian national will do. Which has its own signal: We’ll target just any Canadian in retaliation.” said J. Michael Cole, a Taipei-based former analyst with the Canadian Security Intelligence Service who is a senior non-resident fellow with the University of Nottingham in Britain.

He sees this “as China going after the weaker party in all this – Canada – which not only pressures Ottawa but also can be used to accentuate a rift in U.S.-Canada relations.”

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The Chinese government has said Canadians have nothing to fear, noting that 780,000 people from Canada had come to China in the first 10 months of this year.

In fact, “since the Canadian government has taken a wrong action under the orders of the U.S. and arrested Ms. Meng, many Chinese people are now wondering if Canada is a safe country,” Foreign Ministry spokesman Lu Kang said Thursday.

He cast doubt on the idea that Chinese companies would back away from dealing with Canadians.

“It doesn't sound like something that Chinese people would do,” he said. If foreigners “comply with China's law and regulations, there's nothing to worry about,” he said.

Some Canadians in China, meanwhile, said they felt Canada had been placed in an unfair situation, wedged in the middle of a conflict between the world’s largest economic powers.

“What’s going on is basically a tribal war. Canada shouldn’t pick sides. It’s a terrible outcome either way,” said Alex Zhu, who splits his time between China and British Columbia.

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Still, others said the last week has left them feeling vulnerable.

“Depending on how this is resolved,” said Tom Bailey, who has been in China for six years, “there could be a few extra urine tests after Canadians come back from the Christmas holiday in a more recently liberalized Canada.”

With a file from the Canadian Press

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