Carney Signals Cautious Approach on China With New Security Guardrails Framework

Prime Minister Mark Carney has begun to lay out publicly what he sees as boundaries when dealing with China, as his government wades into a new relationship with the economic giant.

Carney, who earlier this year called China one of Canada's biggest security threats, has more recently spoken openly about resetting the relationship with Beijing as the Liberal government seeks more trading partners in the wake of U.S. President Donald Trump's trade war.

In a year-end interview with CBC News, he was asked by chief political correspondent Rosemary Barton if he sees risks in Canada aligning economically with China.

"The question is how deep is the relationship and how clear are the guardrails around that relationship," he said.

"There are areas, artificial intelligence, critical minerals, defence, where clearly the security threats are such that we would not have a deep relationship with China in those areas."

Carney said outside of the European Union and the United Kingdom, he doesn't see Canada having "deep relationships with many countries in those areas" — even Canada's once closest ally.

"We have a strategic question for our country: how deep those relationships are in those areas with the United States, given our deep integration already with the United States and given the shifting trading relationship," he said in the interview.

Carney's proposed guardrails will be closely watched as he casts a wider net for trading partners — a key pillar of his agenda.

"Never have all your eggs in one basket. We have too many eggs in the American basket," he said.

"We would like to maintain that relationship and grow others, but we absolutely need to grow others. And the 's' is a capital 's' at the end of others."

The prime minister said that list includes China and India, two countries the Liberal government had a fractured relationship with under Justin Trudeau.

Trudeau had pursued more trade with China early in his leadership, but talks soured in 2018 after the arrest of Huawei's chief financial officer Meng Wanzhou in Vancouver on a U.S. extradition warrant in a corruption case.

Canadians Michael Kovrig, a diplomat, and Michael Spavor, an entrepreneur who worked in North Korea and China, were detained in China days later on spying and other charges. Beijing denied the detentions were linked to the Huawei case.

The public inquiry investigating allegations of election meddling that wrapped this January called China "the most persistent and sophisticated foreign interference threat to Canada."

Carney has embraced what he called a "turning point" in the relationship, accepting an invitation from President Xi Jinping to visit after the two leaders met during the Asia-Pacific Economic Cooperation summit in South Korea this fall.

Carney needs to raise sensitive issues: diplomat

Carney has suggested his brand of government will change Ottawa's policy toward Chinese investment in Canada. Over the past decade, the government has taken a hawkish approach to companies with connections to Beijing, citing national security concerns.

There's also mounting pressure to convince China to drop its tariffs on canola products, which were applied after Ottawa hit Chinese electric vehicles with 100 per cent tariffs.

Guy Saint-Jacques, who served as Canada's ambassador to China from 2012 to 2016, said the government can work with China — while pushing back on sensitive issues, including China's human rights record.

"In a way, we have no choice. We have to engage with China," he said, noting Carney is on a "mission" to diversify trade.

"It's a superpower on the political side. We have to ask them to put pressure on Russia to stop the war in Ukraine. We have tell them to be careful with what they do with Taiwan. And, of course, we know also that China is using social media to undermine our democracy, and so the prime minister has to be very clear that such behavior won't be tolerated."

Domestically, Saint-Jacques also said the government has to convince Canadians it has learned the lessons from the foreign interference inquiry. It still hasn't set up the foreign agent registry, for example.

"We know that China can be brutal, that it bullies Canadians of Chinese origin," he said.

"I think there are a number of things where we can work with China, but at the same time we have to be very clear that there will be red lines, that if China crosses these red lines there will be penalties."

By: Catharine Tunney, CBC News