The year is 2005, Paul Martin and his Liberal government are in power, and both trade and political relations between Canada and China could not be better.  Fast forward to 2007, and Steven Harper and the Conservative government are in power – relations between Canada and China are at an all time low.  The question you should be asking yourself is how did Canadian-Chinese relations deteriorate so fast, and what can be done to fix it?

The first thing you should know is that the Chinese firmly believe that economics and politics are not mutually exclusive – any political tensions that arise result in direct business problems, and vice-versa.  In China, if political relations are strong, then trade relations will be strong.

Take a look at the timeline below, outlining political events between China and Canada from 2005 – 2007.

• Assistant Foreign Minister He Yafei Meets with the Delegation of Canadian Federal Members of Parliament (2007-01-22) 
• Foreign Minister Li Zhaoxing Meets with Minister of International Trade of Canada (2007-01-18) 
• Vice Foreign Minister Yang Jiechi Meets with Premier Gordon Campbell of the Province of British Columbia of Canada (2006-11-21) 
• Assistant Foreign Minister He Yafei Meets with CCBC President Marchi (2006-11-02) 
• Foreign Minister Li Zhaoxing Holds a Phone Conversation with His Canadian Counterpart Mackay (2006-02-15) 
• The First Confucius Institute in Canada Opens in Vancouver Chen Zhili Attends the Plaque Unveiling Ceremony of the Institute (2006-02-08) 
• Vice Foreign Minister Yang Jiechi Meets with Assistant Deputy Minister Wright of the Department of Foreign Affairs and International Trade of Canada (2006-01-25) 
• Hu Jintao Meets with Canadian Prime Minister Martin (2005-09-18) 
• Hu Jintao Meets with Premier of the Province of British Columbia of Canada (2005-09-18) 
• Hu Jintao Meets with Premier of Ontario Province and Ministers of the Canadian Federal Government (2005-09-11) 
• President Hu Jintao Holds Important Talks with Prime Minister Paul Martin and Declares to Promote China-Canada Relations into Strategic Partnership (2005-09-10) 
• Li Zhaoxing Holds Talks with Canadian Foreign Minister Pettigrew (2005-09-09) 
• Hu Jintao Meets with Canadian Governor-General Adrienne Clarkson (2005-09-09) 
• Hu Jintao Sets Out to Visit Canada and Mexico and Attend the UN Summit (2005-09-08) 
• Foreign Ministry Official Gives a Briefing on the Background of President Hu Jintao’s Upcoming Visits to the United States, Canada and Mexico and Attendance to the World Summit 2005 at the 60th Anniversary of the Founding of the United Nations (2005-08-30) 
• Jia Qinglin Meets with Speaker of the Canadian Senate and Irish Parliament Leaders Respectively (2005-06-08) 
• Wu Bangguo Meets with Speaker of the Canadian Senate (2005-06-06) 
• Hu Jintao Meets with Canadian Prime Minister to Boost Comprehensive Cooperative Partnership (2005-01-23) 
• Wu Bangguo Meets with Canadian Prime Minister, Saying that China Attaches Great Importance to Developing Relations with Canada (2005-01-23) 
• Premier Wen Jiabao Holds Talks with Canadian Prime Minister Martin (2005-01-23)

What you should notice is that in 2005, Canada was interacting on a regular basis with the top members of the Central Government, and in 2006/2007, Canadian political leaders are barely even talking with the Chinese government.  Let me summarize what happened to get us here.

In 2005, the President of China, Hu Jintao, visited Canada and created a “strategic partnership” with then Prime Minister Paul Martin.  The aim of this partnership was to open two-way investment between the two countries, with China initially focusing on investments in Canadian natural resources.  The partnership was also supposed to result in a doubling of trade by 2010. 

In 2006, newly elected Canadian Prime Minister Steven Harper and his Conservative government caused Canadian-Chinese relations to cool off.  The new Canadian government awarded citizenship to the Dalai Lama, criticized China’s human rights record, accused China of commercial espionage, delayed an important meeting between foreign ministers, and made favourable comments towards Taiwan.  These recent acts have resulted negatively in trade relations between Canada and China, with the most visible effect occurring when the Chinese cancelled a meeting between Prime Minister Harper and President Hu Jintao in November 2006. 

I have no doubt that if you compare the Canadian-China trade numbers for 2005 and 2007 you will see a decline. 

Like most things in life, the path to improved relations between Canada and China is not black and white.  There is no simple answer to improve relatinos between our two countries, but one thing should be clear, Canada can not pursue a double agenda - growing trade while asking for political reform - it just won’t work. 

Canadians have to ask themselves where they see Canada in a global marketplace?  Everyone is knocking on China’s door, but who is knocking on ours?  How important is it to grow our trade relationship with China and what does Canada have to do to help the process?

I’m not saying that everything that happens in China is right, or that everything that happens in China is wrong, but the current government definitely seems to lack an understanding of what it means to do business in China.

If you have some time, read this article and then ask yourself if things will get better under the current leadership.