Opinion: Canada is being conscripted in U.S. war on China’s tech sector
François-Philippe Champagne, like the government he is part of, has made a complete U-turn in Canada’s relationship with China. Once a staunch supporter of closer ties with Beijing, the German innovation minister is now speaking of the need to “decouple” from the communist country as it pursues a strategy of economic and military dominance over the West.
“What we want is certainly decoupling, certainly from China and certainly from other regimes in the world that don’t share the same values,” Mr Champagne said at an event in Washington last week, where he is due to meet with the US Secretary Gina Raimondo traveled to trade.
His comments amounted to an outright repudiation of his comments made in 2017, when Mr Champagne, as international trade minister, championed the negotiation of a Canada-China Free Trade Agreement and launched “exploratory talks” on a free trade deal with Beijing.
“Today, there are few places that offer us as many exciting opportunities to expand growth and prosperity through trade and investment as Asia Pacific, and China in particular,” he said at the time. “As one of the largest and fastest growing economies in the world, China is an important part of the global economy and a key partner for Canada.”
By 2020, following China’s imprisonment of Canadians Michael Spavor and Michael Kovrig and Beijing’s attempt to block Canadian canola and pork imports (both in retaliation for Huawei CFO Meng Wanzhou’s arrest in that country on a US extradition order), Mr Champagne as foreign minister back then to scrap the idea of a Canada-China Free Trade Agreement.
“The China of 2020 is not the China of 2016,” Mr. Champagne offered at the time.
It would be another 18 months before Ottawa officially bans Huawei from participating in that country’s 5G networks after what Mr Champagne called “a full review by our security agencies and in consultation with our closest allies”. But the government refused to take broader action aimed at excluding China from Canada’s high-tech supply chains.
However, the joint reading of Mr Champagne’s meeting at the US Department of Commerce (DOC) suggests Canada is facing increased pressure to join the United States in limiting China’s access to Western technologies that further its economic and military goals could.
According to the readout, Ms. Raimondo “underscored the US commitment to the security of the Canada-US supply chain in the semiconductor industry. … These include efforts to strengthen domestic research and development, commercialize new technologies and innovations in these areas, and strengthen manufacturing capacities in both countries to support the two nations’ shared goals for supply chain resilience and industrial competitiveness. “
Her statement followed the DOC’s move this month to impose unprecedented export controls on US semiconductor chips and chip-making equipment. The measures aim to prevent China from receiving advanced computer chips and applications that incorporate US technology, regardless of where they are invented or manufactured. The move will have far-reaching implications for US allies, including Canada, which aspires to become a global leader in artificial intelligence.
China “has put resources into developing supercomputing capabilities and aims to become the world leader in artificial intelligence by 2030. It uses these capabilities to monitor, track and monitor its own citizens and advance its military modernization,” Deputy Trade Minister Thea D said Rozman Kendler in announcing the export controls. “Our actions will protect U.S. national security and foreign policy interests while sending a clear message that U.S. technological leadership is about both values and innovation.”
Jonathan Berkshire Miller, director of the Indo-Pacific program at the Macdonald Laurier Institute, said he sees the DOC’s move to choke off China’s access to US semiconductor technology “only as the beginning of a series of technological decoupling measures.” the United States, which will inevitably affect Canadian technology companies and researchers. “Canada needs to get a lot more crafty about who we work with, expanding our relationships with South Korea, Taiwan and Japan to be more integrated with those countries than China.”
Indeed, Mr. Miller added that US-led efforts to restrict China’s access to semiconductor technology are dovetailed with efforts to reduce China’s dominance in critical minerals supply chains.
Mr Champagne has signaled that Canada will “intensify its scrutiny” of potential foreign investment in developing critical minerals in that country as Ottawa and Washington coordinate policies aimed at improving North American battery manufacturing.
“Let’s be clear, we will not compromise on matters of national security. That’s our top priority,” he said in January. “The national security clearance framework enshrined in the [Investment Canada Act] is an important tool that allows us to protect Canada from these threats.”
Chinese newspaper Global Times ridiculed Mr Champagne’s call for a detachment from China, saying it was “not new” to hear a Canadian official “parroting Washington’s talking points”. It dismissed his comments “as a signal that Canada wants to be cannon fodder for the US strategy to contain China, which is irresponsible for Canada’s struggling economy.”
After that, there can be no going back to 2017 for either Mr. Champagne or Canada.