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The China Challenge

Huhua Cao
Vivienne Poy

Evolution of Canada-China relations

Chapter 4. Canada and China: The China Strategy of 1987

B. Michael Frolic

Texte intégral

1By 1985, fifteen years after Canada had recognized the People’s Republic of China, relations between the two countries had reached a level of maturity. Trade was steadily expanding and China ranked as Canada’s fifth largest trading partner. A growing number of high-level visits marked an apparent tightening of relations between the two governments. In early 1984 China’s Premier, Zhao Ziyang, became the first leader of a Communist country to address the Canadian House of Commons. Both sides continued to invoke the spirit of Dr. Norman Bethune in declaring that they had developed “a special relationship.” A fledgling aid programme administered by the Canadian International Development Agency (CIDA) had emerged as a promising link, and a family reunification programme, established during Prime Minister Pierre Trudeau’s visit to China in 1973, had brought to Canada over 25,000 Chinese trapped during the Cold War to rejoin their families. China was now casting off the fetters of revolutionary socialism and self-imposed isolation, and was engaging with the outside world. In 1978, Deng Xiaoping had declared that China was “opening up” (kaifangle), and that modernization, not class struggle, had become China’s top priority. Foreigners were invited in to revitalize a flagging economy, and Chinese were encouraged to xiahai, to jump into the sea of markets and join the outside world. By 1985, then, a new China was emerging, one that had abandoned collectivized agriculture, was actively soliciting foreign investment and technology, and was promoting entrepreneurship and free market principles.

2Foreigners, remembering the China of the 1970s, initially were wary of this sudden turn in direction. While Deng was the spokesman for a new type of Chinese economy and a more open relationship with the outside world (“It does not matter if the cat is black or white as long as it catches mice.”), his opponents within the Chinese Communist Party resisted these ideological changes. The struggle between reformers and “hardliners” continued throughout the 1980s, lending a measure of uncertainty to the long-term stability of the post-Mao reforms. Could China succeed in so abruptly changing course, moving from a planned socialist economy to one that willingly embraced Western (capitalist) market principles? Had China given up its commitment to supporting international revolutionary movements? Could it be trusted to take on a responsible role in conventional international institutions? The split between China and the Soviet Union had produced an emerging multipolar world. The Cold War was winding down and China was searching for a significant place for itself in this changing world order, where the new Sino-American relationship was becoming the gold standard for measuring foreign reactions to Chinese policies and behaviour.

3Since the 1960s Canadians had articulated the idea that Canada had a mission to bring China into the community of nations, thus ending its isolation. In 1970, the Canadian government made a formal commitment to help China gain admission to the United Nations at the expense of removing Taiwan as a member. One of Canada’s tasks in the 1970s was facilitating China’s entry into multilateral regimes and institutions. By the mid-1980s China had acquired membership in the World Bank and the International Monetary Fund, and Canada had pledged to assist its entry into the General Agreement on Tariffs and Trade. Canada actively promoted China’s participation in arms limitation talks and in international nuclear non-proliferation and testing regimes. In 1983, Trudeau attempted to create a multilateral “peace initiative” bringing together the Soviet Union, the United States and China.

4The first fifteen years, therefore, represented an ambitious undertaking in the midst of far-reaching international and, in China, domestic transformation. No one was exactly sure about the course of China’s new path, but there was an air of optimism that engagement with China was a major step forward. For the most part, however, while not opposing closer relations with China, the majority of Canadians paid scant attention to the construction of closer ties. A small policy community of bureaucrats and politicians, occasionally joined by academics and a few others, created and administered China policy. The attention of most Canadians lay elsewhere, primarily on the weakened state of the economy, the love–hate relationship with the United States, the effects of the oil crises, and the constitutional issues involving the muffling of Quebec separatism and the reassertion of Canadian national identity.

Brian Mulroney and Canada’s China Policy

5In September 1984, the election of a Progressive Conservative government led by Brian Mulroney heralded a shift in Canadian politics. After twenty-one years of Liberal rule, barely interrupted by Joe Clark’s short-lived government of 1979, the Conservatives were ready to put their stamp on Canada. Electors had voted in a party that favoured big business, advocated a reduced role for government, sought to water down restrictions on foreign investment in Canada, was intent on dismantling Canada’s national energy policy, and was determined to forge a better relationship with the United States. The party also contained within its ranks an anti-Communist group that supported Taiwanese autonomy, was suspicious of China and publicly criticized Chinese abuses of human rights.

6The expectation was that Mulroney would move quickly to distance himself from Liberal foreign policy. This certainly was the case with his immediate shift to more positive relations with the United States. However, the impact on Canada’s China policy was limited. While Mulroney met with Ottawa mandarins and pointedly asked, “What makes you think I should take your advice?” (Globe and Mail 1984) his government’s policy initially appeared to be one of continuity rather than change. Mulroney had a full domestic and international agenda in other areas, and China was not a top priority. While the Conservatives wanted to develop Canada’s trade in the Asia–Pacific region, as did the Liberals, the main target remained Japan, not China. Like the Liberals, the Conservatives, despite their criticism of Canada’s “one China” policy and their support for Taiwan, remained committed to that policy. In the House of Commons on October 11, 1985, Mulroney said: “I have indicated to the Premier of China and the President of China the fact that the intention of this Government is to pursue the policy set out by my predecessor, Mr. Trudeau, with which I agree. We have honoured that in all circumstances” (Government of Canada 1985).

7In March 1986, eighteen months after taking power, Mulroney made a visit to China (as reported in the Globe and Mail, May 13, 1986). The time had come to focus on China and put his imprint on Canada’s China policy. Mulroney had visited China in 1979 as a private citizen and the contrast seven years later was palpable. He commented:

I was struck by the tremendous changes in the last six or seven years, tremendous progress that we can see visibly on the streets.... There is a greater sense of well-being, a greater consumer reality that is there, that seems to be shared by the Chinese population.... As Chairman Deng said the other day, the Chinese are trying to be realistic. They have an enormous problem, unique in the world, in terms of inherent difficulties that arise because of [the size of] the population itself. (Globe and Mail 1986)

8During Mulroney’s visit, Canada announced the expansion of concessional financing to promote trade, an additional CA$ 350 million to blend with the CA$ 2 billion worth of credit that had previously been extended by the Export Development Corporation (EDC). CIDA’s aid programme was doubled to CA$ 200 million over the next five years. Canada presented China with a bulk fertilizer blending plant worth CA$ 300 million to promote Canadian potash sales. Canada also won assurances that it would remain a favoured supplier of wheat. The Chinese encouraged Canadian business to invest in China, including participation in the Three Gorges hydroelectric project, which was most attractive to the Canadian power industry. In a meeting with Canadian businesspeople in Beijing, Mulroney “promised to cooperate with businessmen and the Chinese government to make the next century ‘the age of the Pacific’” (Globe and Mail 1986).

9In his meetings with China’s leaders, Mulroney received assurances that China would remain committed to the “open door policy” and was developing a trading regime that conformed to international practices in protecting commercial rights and intellectual property. With respect to human rights in general, Mulroney made a significant public departure from past Liberal policy by openly dwelling on human rights in his farewell meeting with Premier Zhao Ziyang, commenting later:

My meeting with Premier Zhao was entirely devoted, by and large, to the human rights issue.... No one can challenge the right of a duly elected government to raise any issue with a friend, even though I recognize the traditional Chinese position that this is an internal matter. I didn’t raise it in a spirit of hostility. I raised it as the kind of subject that can be discussed between friends whose friendship is maturing and open to that kind of discussion. (Globe and Mail 1986)

10In the months following the Prime Minister’s visit the primary focus was on trade. While China had “opened up” and Canada seemingly was poised to expand its commercial links, trade was sluggish, failing to meet Canadian expectations. The Chinese market was slow to open up. Canada faced increased competition from foreign challengers, Canadian business people complained that Canada needed to expand its trade promotion and commercial presence. China was hesitant in offering foreign companies intellectual property protection. Canadian companies were lobbying for greater participation by the government in securing deals, and the large concessional financing fund was underused by the Chinese. Canada continued to have a trade surplus with China, but the gap was narrowing and Canada continued to remain heavily dependent on resource-based exports, primarily of wheat.

The China Strategy of 1987

11Aside from trade concerns, the bilateral relationship in late 1986 needed to take into account a number of other developments. In the fall of that year the government instructed the Department of Foreign Affairs and International Trade (DFAIT) to develop a strategic plan for China. While the primary goal was to increase trade, the eventual “Canadian Strategy for China,” as set out in a Memorandum to Cabinet, was intended to fulfill a number of other objectives (Cabinet of Canada 1987). First, it would consolidate and focus the various Canadian instrumentalities that had grown up over the first fifteen years. The Strategy could pull together the many bilateral components and provide a managerial basis for these initiatives. Thus high-level visits and trade could be linked more tightly together, CIDA’s aid programme could be used to facilitate trade, and policies on culture and immigration could be attuned to economic and trade interests.

12Second, as a follow-up to the Prime Minister’s visit, the Strategy could put Mulroney’s imprint on Canada’s China policy as he sought to distance his government from Trudeau and the Liberals in foreign affairs. One officer in DFAIT observed:

We were ready to do this. The Prime Minister’s Office told us right after Mulroney’s trip that he needed a key ‘deliverable’ to establish his China credentials and implement the initiative announced in Beijing. We were already working on the components of an action plan when we received official notice from the politicians to put the document together. (Interview 1996)

13Third, behind the scenes the Canadian foreign policy bureaucracy was in the throes of major change. In 1983, the Department of External Affairs (DEA) and the Department of Industry, Trade and Commerce (ITC) had been reorganized into a single body, essentially to cope more effectively with their increasingly complex tasks. This merger of Canada’s two main internationally focused political and economic bureaucracies created both opportunities and tensions, as Ottawa mandarins struggled to adapt to new roles and expectations. The China Strategy served as a testing ground for the new partnership, bringing together sixteen ministries and departments under the aegis of a new department, eventually to be headed by three ministers, for foreign affairs, international trade and development, and development assistance. To the former “political” mandarins at the DEA, it was an opportunity to maintain their leadership and to resist challenges to their fading pre-eminence in the foreign policy arena. According to one DFAIT officer, interviewed in 1996, “It was a chance for us to retain our dominant role in the coordination and implementation of foreign policy. Putting together a China Strategy was a test of our abilities” (Interview 1996).

14Finally, the Strategy served to emphasize the increased importance of Canada’s relations with China. It was the only country that received special treatment, with a strategic plan devoted to strengthening a bilateral relationship. While continentalism and trade relations with the United States were the primary foreign policy objectives of the Mulroney government, it was clear that China was emerging as another priority, soon to contend strongly with Japan. Implementing the Strategy also implied that Canada continued to be relatively optimistic about the long-term stability of China’s economic and political transformation, even as factional struggles persisted at the highest echelons of the regime.

15Organizations have their formal and informal histories, and DFAIT is no exception. While the official nod from the politicians and the Prime Minister’s Office (PMO) to draft a China Strategy occurred in the fall of 1986, informally the process had begun earlier, in the waning days of the Trudeau era. A senior official, John Hadwen, having just returned from an ambassadorial posting abroad, put together a paper proposing that Canada develop a China strategy, consolidating what had been achieved and providing a guideline for the future.

There’s a key document you won’t find in the files—I wrote it in 1983. It was entitled ‘Why Canada Should Now Make a Major Effort in China.’ I sent it up and no one ever sent me a reply. After a while, I just went ahead and did it. And that was that.... How to get it organized? I circulated it to everyone in the Department and consulted widely, with a heavy emphasis on trade.... I went to China with EDC in late 1983 to find out why the Chinese were shying away from our two-million-dollar line of credit.... I soon realized that while other government ministries and departments had increasing interests in China, DFAIT could put it all together. We had to be the manager and coordinator. (Conversation 1994)

16Beginning in 1984, DFAIT organized an interdepartmental China Working Group (CWG) to help to coordinate China-related activities. Trade was the main focus, but discussions also centred on evaluating China’s political stability, linking trade and aid, coordinating high-level visits, and bringing in perspectives from academics and non-governmental organizations. According to Hadwen, “The China Working Group used to meet at night under my direction. We met at 7 p.m. and I ordered in sandwiches, wine and beer. Sometimes we met two to three times a month” (Conversation 1994).

17I attended CWG meetings in 1985 and 1986. It was noted at the meeting in 1985 that there was a “broad consensus” that China’s modernization was going to continue and was presenting Canada with greater opportunities. How to focus and coordinate the sudden surge in China related activities? How to maximize our trade potential? How to be optimistic, yet maintain a cautious perspective? At the meeting in 1986, we received a debriefing on the Prime Minister’s visit to China, as well as those of several cabinet ministers, and updates on concessional financing (from CIDA and EDC), agricultural cooperation (from Agriculture Canada), and thermal and hydroelectric power (from the Task Force on the Hydro-Electric Power Sector). I had the impression that we were processing a great deal of information about China and, within the constraints of time and resources, trying to develop a coherent China strategy. One DFAIT official who also participated in the CWG commented in 1986, “It’s like herding cats. Too many independent-minded departments, egged on by business and political interests. Too many egos. It’s a big challenge” (Conversation 1986).

18In the fall of 1986, DFAIT was instructed by the PMO to prepare a submission to Cabinet on relations with China. A drafting team was assembled to liaise with concerned parties: the various government departments, the CWG, the Embassy in Beijing and selected members of the policy community. The final stage of the process, the drafting of the Memorandum to Cabinet, was launched at a meeting of the CWG on January 17, 1987. Copies of the draft were sent to the ministers involved by March, and then forwarded to the Cabinet Committee on Foreign Affairs and Defence Policy at the end of the month. Cabinet approved the Strategy in early April 1987 (Cabinet of Canada 1987: Volume 38, File 20-1-2).

19In the drafting process DFAIT was guided by a number of recommendations made by the drafting team. The basic issue, it said, was “how to capitalize on Canada’s fascination with China to seize opportunities created by its modernization drive and to position ourselves for the year 2000, when China should have the world’s third largest GDP after the United States and Japan” (Cabinet of Canada 1987). The Strategy recommended that all ministerial visits henceforth should target priority government objectives, in order to stanch the excessive flow of officials beset by “China fever” and making questionable journeys. The remaining recommendations were:

  • to elevate the China dialogue on key Asian strategic concerns and global arms-control issues to the ministerial level;
  • to develop a cadre of Chinese-speaking officials and specialists to deliver programmes in China;
  • to promote better partnership between government and the private sector, in order to promote long-term objectives;
  • to have high-level visits target economic objectives;
  • to convene periodic meetings of leading business, academic and other China specialists “to ensure that Canadian strategy is based on national consensus”;
  • to establish working committees to link federal, provincial and private-sector groups to promote trade objectives;
  • to increase Canada’s use of the “China connection” through Hong Kong;
  • to pursue co-financing arrangements with international financial institutions to lever greater procurement opportunities for Canadian companies;
  • to extend academic, cultural, professional, sports, media and other exchanges, in order to increase the number of Chinese students in Canada, to promote people-to-people contacts, to enrich Canada’s multicultural heritage, and to project Canada’s image as a highly developed and open society.

20The rationale for the China Strategy underlined the growing political and strategic importance of China to Canada. For example, according to the document, “China is a dominant Asia power. Canada has a stake in China’s stability. Canada’s recognition of the Asia–Pacific region as key to Canadian security and economic interests requires that our political dialogue be strengthened.” The document noted that Canada had positioned itself to meet “increasingly fierce competition” in the China market, and that a careful “Canada Inc.” approach to China was “vital to commercial success.” In an accompanying press release, the government referred to a “focused,” “orchestrated” and “aggressive” strategy to cope with “our fascination about China,” which often is “undertaken without a sufficient assessment of real potential benefits to Canada.” It asserted that there was now “an urgent need for more timely and incisive knowledge of developments in China” and for “better management of Canada–China relations through improved consultative and cooperative mechanisms.”

21What was the reaction of those on the ground in China, the officials in the Canadian Embassy in Beijing? The Ambassador, Richard Vessot Gorham, who had been at the post since May 1984, was generally supportive of the exercise. In his view, while foreign observers should not be deluded into thinking that China will emerge as some sort of mirror image of Western democracy, with full freedom of political expression, a free press or respect for individual rights and liberties, nonetheless the reforms appeared “to have legs,” and “the excellent state of Canada–China relations puts Canada in a favoured position to take advantage of China’s opening up and modernization” (Cabinet of Canada 1987: Volume 38, File 20-1-2). In a telegram dated February 6, 1987, the Ambassador reminded Ottawa that it should proceed with caution and temper optimism with a measure of realism:

A hardnosed look would lead us to conclude that the return on our investment (over and above Chinese expressions and sentiments of friendship and goodwill) have not been impressive, other than a sustained market for our wheat (which the Chinese buy because they need it) and recent encouraging sales of high tech end products. We can cite no evidence that the lustre of the Maple Leaf or the memory of Norman Bethune, despite all our efforts and our investment of human and financial resources, have persuaded Chinese negotiators to opt for sourcing their requirements in Canada. (Cabinet of Canada 1987)

22The Ambassador “welcomed the general thrust” of the draft Strategy, “especially the mandate to coordinate more effectively the new interests of the various government departments and agencies that previously were not involved with China.” He was critical, however, of several parts of the draft. In his opinion, targeting ministerial visits to sectoral priorities was a good idea, but would be almost impossible to achieve. In addition, “dialogue will not produce Chinese recognition of Canada as a world power. If we want to improve our knowledge of China and train more Chinese-language speakers, we need to provide substantially more resources to move out of the quill pen era.” The Strategy recommended that Canada should help to promote Chinese exports to Canada, in order to reduce the large Canadian surplus in trade with China, but the Ambassador wondered whether this was a useful strategy, since Canada would be building up China’s capacity to become our trade competitor. He also thought that the comments about China’s rapid economic development were oversimplified. China’s absorption of Western technology and management principles required social and political liberalization, and China would encounter many difficulties in disengaging from its authoritarian past and present. He noted that “the principles which have governed Canada’s relationship to China remain valid” and that the Strategy could build on what had already been achieved. Nevertheless, he cautioned Ottawa: “Don’t be mesmerized by the sheer size of China and this current shift in PRC policy.”

Selections from the Text of the China Strategy

23The document is an impressive summary of informed Canadian thinking about China at the time, with an equally convincing set of assumptions and policy recommendations for future action. In this section I present a few highlights from the document.

24On China’s commitment to reform:

China’s modern history has been marked by a realization that it cannot become a major power without accepting foreign technology and management techniques, and also by a deeply xenophobic reaction to the penetration of western ideas and philosophy.... The long-term durability of the reform programme is not to be taken for granted.... China is unlikely to waver from its objective to become a modern industrial power in the shortest possible time.... To achieve this status is a matter of urgency and pride for all Chinese, “reformers” and “conservatives” alike.

25On China’s key political and strategic role:

A nuclear weapon state, China is a major military power, a key player in the Asia–Pacific region, which is increasingly vital to Canada’s long-term security and economic prosperity. China’s relations with the United States have become increasingly warm, although United States policy towards Taiwan, including arms sales, hinders Sino-American cooperation. The situation in Asia remains volatile. The Soviet Union, perceived by China as its main threat, occupies Afghanistan, subsidizes an expansionist Vietnam, arms Filipino rebels, and is increasingly close to a dangerously unpredictable North Korea.... Annual ministerial-level consultations on security issues are essential to promote a growing convergence of security interests with China.

26On Canada’s relations with Taiwan:

The one-China policy has been the cornerstone of Canada’s mutually beneficial relationship with the PRC since 1970. Canada does not maintain official relations with Taiwan, but the government encourages people-to-people contacts. The recent establishment by the Canadian Chamber of Commerce of an office in Taipei should result in better access to a potentially lucrative market.

27On Canadian development assistance to China:

CIDA’s involvement in China was a logical step in the construction of Canada’s bilateral relationship. Development assistance responds to real needs in China, particularly in the area of technology transfer and human resources. Canada’s programme is now one of the largest in China, ranking second only to Japan’s. CIDA’s philosophy is to build upon China’s open-door policy designed to acquire Western technologies and skills ... in jointly identified sectors where Canadian expertise meets Chinese priorities, for example, agriculture, energy, and forestry, as well as telecommunications and transportation. CIDA also provides pre-project studies through its Industrial Cooperation Division. These provide substantial opportunities for Canadian companies with commercial interests.

28On trade issues:

The composition of Canada–China trade has undergone major changes. Over the past two decades Canada has enjoyed a large surplus in our bilateral trade, largely as a result of strong grain and resource exports. The gap has shrunk in recent years.... Large rapid gains in the sales of Chinese clothing and textiles account for the declining deficit with Canada.... Negotiations to renew the clothing restraint schedules ended without an agreement this January.... Chinese textile exporters still have room to manoeuvre, moving “up market” or into unrestrained categories. Grain sales have been the core of Canada’s exporting success in China.... As China’s wheat production has increased in the early 1980s, Canadian sales have declined.... The dramatic recent drop in world wheat prices slashed receipts to Canada by almost one half. New suppliers have entered the fray and competition is felt from expanding Chinese production capacities.
Overall conditions for doing business in China are becoming increasingly complex (decentralization of decision-making, financial reform, the evolving regulatory environment, are examples of this trend).... To launch joint ventures in a complicated and unfamiliar environment, where foreign exchange is scarce, Canadians must be well-informed, persistent, and adaptive. Hence, government support should be directed in a selective fashion to those Canadian companies that have products/technology/expertise that respond to China’s priority requirements, and the “staying power” to weather both economic ups and downs, and the slow approval process—we are seeing encouraging progress in our capital goods sector. For example, Babcock & Wilcox have sold steam generators worth 203 million dollars, and are in close pursuit of similar contracts. Oil and gas equipment sales were [worth] almost 120 million dollars in 1986. Super heavy mining vehicles represented some 70 million dollars of exports.

29On competition in the China market:

China is a fiercely competitive market. Japan, the United States, Hong Kong, and Germany are the most important exporters to China, with Canada ranking a distant fifth. Japan’s remarkable success in China is based on a corporate culture which recognizes the need for long-term commitment, the presence of over 250 trade offices throughout China, and an industrial and trading house capability that can deal with Chinese requirements for counter trade and commodity trade purchases for export sales.
The Americans sell fewer consumer durables than the Japanese, but successfully compete in China in the heavy industry, oil and gas, mining, and transportation sectors ... a result of the proven quality of American technology and the staying power of the multinationals. The Australians have adopted a successful trade strategy which targets limited public and private resources to sectors where Australian companies are internationally competitive, for example, iron and steel, wool, textiles, non-ferrous metals, transportation, communications, and coal. This targeted and pragmatic approach is more relevant to the Canadian situation.

30(It should be noted that in 1983 Australia had adopted a China Action Plan, which in several respects was similar to the Canadian China Strategy. Four years later, Canadian officials consulted with their Australian counterparts when drafting the Canadian Strategy.)

31On Canadian government activities in China:

Various federal line departments and agencies have been active in China for several years. While the Programme for Export Market Development and the Promotional Projects Programme are the prime programmes for export promotion, the federal government has recently provided funding for new tools specifically targeted to China. These include the 350-million-dollar concessional financing facility administered by EDC. The CIDA Technical Cooperation Programme is designed to provide funding for feasibility studies. The National Trade Strategy, which was adopted in the fall of 1985, supported the opening of the Shanghai Consulate and the resources to create two new trade officer positions in Beijing.
While appreciative of government assistance, business groups are concerned about the lack of focus of government efforts and the potential duplication of federal, provincial and municipal programmes.... Business groups have also voiced a need for more in-depth analysis and identification of commercial opportunities. Federal government financial assistance should be channelled into sectors where it can make the greatest difference, i.e., energy, agriculture, communications, transportation, and resource development.

32On academic, community and non-government organizations:

Many leading Canadian academics are actively involved in the promotion of exchange programmes with China, often as advisers to provincial or municipal governments. Several have served in our Embassy in Beijing and have maintained close ties with the federal government. Their advice is regularly sought. Several NGOs (Amnesty International) are increasingly active in pursuing human rights and other questions in China. Continued consultations are under way with them to ascertain the appropriate means to conduct a useful dialogue on such sensitive issues with the Chinese government.

33The Strategy did not mention human rights other than in these two brief sentences, even though Prime Minister Mulroney had confronted Zhao Ziyang on these issues in Beijing in 1986, and his government had signalled its intention to elevate the discussion of human rights issues to a more prominent place in the bilateral relationship.

34In the first of two annexes to the Strategy the government discussed how to improve its links with the private sector. Separate meetings were held with executives of the Canadian Export Association, the Canadian Chamber of Commerce, the Canada–China Trade Council and eleven companies that traded with China. The business associations flagged the following concerns: “an urgent need for better control over the growing number of visits to China; insufficient knowledge of the China market; the need for long-term corporate and financial commitment; learning how to set up joint ventures [and] how to utilize government programmes.” They also reaffirmed the value of “carefully selected and timed visits to China by federal ministers attuned to trade objectives,” and recommended better, more competitive financing arrangements and a “Canada Inc.” approach to China that would link government and business more closely together.

35In a second annex the government attached its communications plan, stating that “Canadians appear to regard China as a country of priority foreign policy importance.” However, it would be

a challenge for Canada to channel Canadians’ general and sometimes romanticized notions about China along more realistic and constructive lines.... Public opinion would support a government initiative to make our relations with China more productive, particularly one directly linked to furthering Canadian economic interests and generating jobs for Canadians.

36The annex added that the growing Chinese ethnic community in Canada “would support new government initiatives with respect to China.” Canadians were to be given the following message by the government as it carried out the provisions of the China Strategy:

It is in the interest of all Canadians that relations with China be concluded in the context of a national strategy that gives coherence to exchanges taking place at all levels of government, by NGOS and by the private sector.... A successful further development of relations with China means potential prosperity and jobs for Canadians.

37The senior staff at the Canadian Embassy in Beijing would be enlisted to go on comprehensive speaking tours across every region of Canada, and “a slide show, emphasizing and standardizing our message, will be developed for use by government speakers at service clubs, trade organizations, and other targeted audiences.” Canadian media would have to be briefed to support the new China Strategy:

The government will conduct seminars and background sessions for Canadian journalists.... Some elements of the Canadian media may seek to criticize extensive ministerial travel to the PRC as envisaged in the work plan. One way to attenuate such criticism is to ensure that visas are linked to specific and identified goals, and cast as part of a coherent approach to China.

38In April 1987 the Strategy was announced quietly, without much fanfare, through a press release concerning a future visit to China by Pat Carney, Minister of International Trade. Carney and Joe Clark, the Minister for Foreign Affairs, were to speak at various venues in support of the Strategy, as would other ministers,

before and after their planned trips to the PRC.... Members of Parliament and Senators are to be briefed on the Strategy, and information suitable for use in their constituencies [is to be] made available to them.... Minister Clark will send a letter to the Chairman of the Parliamentary Standing Committee on External Affairs and International Trade and to the Caucus Foreign Affairs Committee outlining the elements of this more strategic approach to relations with China.

The Strategy in Historical Perspective

39The China Strategy is an impressive document. It aptly summarizes the state of relations between Canada and China at a key point in time, and outlines an action plan to provide focus and substance to the future relationship. To my knowledge, Canada has never since produced a similar document, although over the past twenty-three years DFAIT has occasionally attempted less ambitious strategic planning exercises involving China. In 1987, its officials took pride in what they had accomplished. The Strategy, in their view, maximized Canada’s trade objectives, strengthened government-to-government links and solidified the new Department’s position as the coordinator and implementer, if not the originator, of China policy (Personal Interview 2009).

40To be sure, the Strategy overemphasized trade relations with China and devoted minimal space to other aspects of the bilateral relationship, in particular human rights, immigration, consular affairs and people-to-people links. Since 1987, these areas have become more central and now occupy a substantially larger portion of the relationship. In 1987, however, trade was the main issue motivating the creation of the Strategy. These other issues gained more prominence in the 1990s, after the Tiananmen crisis of 1989.

41In addition, the Strategy put Prime Minister Mulroney’s imprint on Canada’s China policy. For twenty-one years China had belonged to Trudeau and the Liberals. After Mulroney’s visit to China the Strategy provided an opportunity to separate the Conservatives from the Liberal past. One therefore might have anticipated a China policy that downplayed the role of government, sought to elevate Canada’s diplomatic relations with Taiwan, expressed suspicion of China as a Communist country, and made criticism of China’s failings on human rights a central element. In fact, however, the Strategy did none of these things. If anything, it advocated a stronger role for government, openly engaged China, reaffirmed the “one China” policy and omitted any criticism on human rights. In the words of one DFAIT official whom I spoke with in 1991, “What we saw, and what we were told, was continuity, with almost no change. To be frank, in retrospect, we hardly missed a step in the transition from Trudeau to Mulroney” (Personal Interview 1991).

42In essence, Canada’s China policy before the Tiananmen crisis maintained its cross-party nature. What divided Liberals and Conservatives domestically appeared not to do so with respect to relations with China. Canadian domestic politics had a minimal impact on the bilateral relationship in the 1980s. One can argue that the focus on trade development was in good part designed to provide an economic boost to Canada (“jobs, jobs, jobs”). However, economic recovery was an all-party goal and China policy was never an election issue. After Tiananmen, the Conservative human rights agenda brought a new dimension to the relationship, but the other parties supported this shift. When the Liberals returned to power in 1993 and made trade the main thrust of the relationship, giving human rights a lower priority, the Conservatives held back and essentially followed along. Only with the Harper government after 2005 did the consensus on China policy break apart, as the Conservatives called into question several of the key principles that had underlain the policy for many years.

43The China Strategy made it clear that China was important to Canada and that trade was the main link. It recognized that post-Mao China had embarked on a new course and that it was possible for Canada to expand its relationship with this “new” China. At the same time, the Strategy tempered its optimism with caution, pointing out that expectations for increased bilateral trade and for political openness inside China might not easily be fulfilled. In this respect, the document was prescient. Even with bilateral trade running at CA$ 50 billion, almost twenty-five times the level of 1986, the economic relationship has not fully met Canadian expectations. Those who have wished for dramatic changes in the area of human rights and democracy have equally been disappointed.

44When the Conservatives took power in 1984, they intended to clean house at the top levels of the public service. The rationale was that, after twenty-one years of Liberal rule the bureaucracy had become a handmaiden of the Liberal Party in power. As noted earlier in this chapter, Mulroney had asked the mandarins in Ottawa, “What makes you think I should take your advice?” In fact, with respect to China policy the Conservatives did just that. They worked closely with the mandarins to put together the new China policy. The China Strategy was drawn up by the bureaucrats at DFAIT in consultation with their political superiors, yet it was very much a product of departmental expertise. The politicians gave the signals and the bureaucrats fell in line.

45The ongoing reorganization of the Canadian foreign affairs bureaucracy played an important role. As DEA, once the “golden child” of foreign affairs, saw its former prominence tarnished, its powers diluted and under attack, it rose to the occasion, taking charge of the merger with ITC, the international trade arm of the bureaucracy. Putting together the Strategy under DEA’s direction showed that the Ottawa political mandarins could respond to the challenge, at least with respect to formulating China policy. One DFAIT official whom I interviewed in 1994 commented:

My background was on the political side. When I got involved in the China Strategy, I had to widen my horizons, working with trade-oriented officials who sometimes lacked political and diplomatic smarts, and I, in turn, needed to focus more sharply on the bottom line, on dollars and cents. (Personal Interview 1994)

46While organization and institutions absolutely mattered in the process of preparing the China Strategy, so too did the work and ideas of individuals. The interplay of these two forces was a central element in the construction of the Strategy. As noted earlier, one official on his own began the process in 1983 and continued for three years developing agendas, coordinating mechanisms, and expanding the horizons of the Strategy-in-the-making. The Prime Minister stepped into the process in 1986 with his visit to China, and then, as another DFAIT official observed, “The PMO shaped the next stage of the process.” Subtle encouragement was also provided by key Chinese officials, who were consulted both in Ottawa and in Beijing (Interviews 1987-1995). It is worth noting that the consultative process was wide, and included groups and individuals not normally part of the foreign policy-making process. Several round tables were convened under the aegis of the Foreign Minister and senior officials, and a number of meetings of the CWG were opened to “outsiders.” This was one of the rare occasions when bureaucrats and politicians permitted the widening of the foreign policy community during the preparation of a policy agenda. Later, after Tiananmen, the China policy community again broadened to include groups and individuals galvanized by that crisis, notably the media, which were suddenly more attentive and critical, persistent human rights activists, and newly politicized members of Canada’s Chinese communities.

47The Strategy met a surprising fate. While it served as a broad framework for Canada’s relations with China, in particular the work of the federal government and its partnership with business, the Strategy was hardly noticed at the time by the public. One DFAIT “China hand” commented that he did not know much about it and, while he agreed with the general thrust of the document, he had, in fact, never seen the complete document (Personal Interview 1992). As Canada began to implement many of the provisions of the Strategy, it was eclipsed by the events at and around Tiananmen Square on June 4, 1989. High-level visits, a key component of the Strategy, were formally suspended for three years. Some CIDA projects were frozen or cancelled. A pall settled over the relationship. Human rights, conspicuously missing from the Strategy, suddenly became a principal public focus of relations until 1994, when the Liberals, back in power and led by Jean Chrétien, once again made trade the basis of the China relationship, with a visit by a large delegation of business people and federal, provincial and territorial leaders to Beijing and Shanghai.

48Today, forty years after diplomatic relations with China were established and almost twenty-five years after the China Strategy was created, both Canada and China have changed in many respects. Nevertheless, what was constructed in 1986–87 remains an important reference point in the evolution of the bilateral relationship, reminding us of what was accomplished in the past and of the issues that continue to affect the relationship today.


49This chapter is part of a book-length study of relations between Canada and China since 1970. It relies heavily on interviews with Canadian and Chinese officials, and materials from the Canadian Department of Foreign Affairs and International Trade. The author wishes to thank officials in both countries for their generous cooperation.



Bellchambers, Glenn. (1988). “A Review of the China Action Plan,” in Dunn, H. A. and Fung, Edmund S. K. (eds.) Sino-Australian Relations, The Record, 1972-1985, Centre for the Study of Sino-Australian Relations, Griffiths University, 135-141.

Cabinet of Canada. (1987, February 10). “Canadian Strategy for China,” Memorandum to the Cabinet of Canada, PNRE-0194. File 20-1-2 China, Volume 38, 1987.

Globe and Mail. (1984, December 10).

Globe and Mail. (1986, May 13). “Greater sense of well-being evident in China, PM says.” Toronto, Ontario, A.5.

Government of Canada. (1985, October 11). House of Commons Debates, 7584-7585.


Conversation with DFAIT official, Ottawa, 1986

Conversation with John Hadwen, Ottawa, 1994

Interviews with officials from the Chinese Ministry of Foreign Affairs in Beijing, and several Chinese Ambassadors to Ottawa, 1987-1995.

Personal Interview, DFAIT Official, Ottawa, 1991

Personal Interview, DFAIT Official, Ottawa, 1994

Personal Interview, DFAIT Official, Ottawa, 1996

Personal Interview, Ottawa, 2008


Professor Emeritus, Department of Political Science, York University, and Senior Research Fellow, Asian Institute, Munk School for Global Affairs, University of Toronto. He is Visiting Professor in Canadian Studies at Beijing Foreign Studies (Beiwai) University Graduate Centre. He first visited China in 1965. In the 1970’s he served as First Secretary in the Canadian Embassy in Beijing. His published works include books on Canada-PRC relations, the Cultural Revolution, civil society in China, and democracy and human rights in S.E Asia. He is currently completing a book on Canada-PRC relations since 1970 and working on a longer term study of political change in China

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