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China’s Canadian Adventure By: Frederick W. Stakelbeck Jr.
FrontPageMagazine.com | Thursday, April 07, 2005


During a Canada-China Business Council dinner held in January, Canadian Prime Minister Paul Martin jubilantly exclaimed, “From British Columbia, Canada is the ideal gateway from China to North America. Thanks to 15 years of free trade, and a decade of NAFTA, Canada can provide assured access to a continent [North America] that is largely barrier free.”

Few observers doubt that Martin’s recent refusal to participate in the North American Missile Defense Shield will have profound implications for the Canada-U.S. bilateral relationship. However, it is his unmitigated support of domestic, pro-China policies allowing for increased Chinese immigration and tourism in western Canada, cooperative energy exploration, increased raw materials exports, and expanded business investment that has Washington extremely concerned.

 

Let’s first look at Chinese immigration and tourism in Canada. According to 2002 statistics released by Canada’s Department of Citizenship and Immigration, China has supplied the largest number of Canadian immigrants since 2000, averaging 30,000 per year, or 15 percent of all immigrants to Canada.  China’s designation of Canada as a travel destination in February is expected to dramatically increase the number of Chinese tourists visiting Canada from 77,000 per year to approximately 1.4 million.

 

Taken independently or collectively, controlled immigration and tourism promote growth and prosperity. Unfortunately, the recent increase in Chinese immigration to Canada and the adoption of a more open tourism policy are more likely to have an adverse impact on North American security and sovereignty by promoting one of China’s emerging cottage industries – spying and espionage.

 

In December, Canada’s National Post reported that the Canadian Security and Intelligence Service (CSIS) warned the country’s parliament that foreign spies were seeking Canada’s science and technology secrets. The annual report specifically cited China as a “very aggressive pursuer” of sensitive information which could be used for military purposes. The report also noted that, “China’s intelligence services are preparing Chinese scientists and students to act as spies to steal Canadian technology and classified information.” At the very least, a report from a highly respected, impartial government body such as CSIS should prompt a re-evaluation of Canada’s immigration and tourism policies by Prime Minister Martin and his national security advisors.

 

The growing concern associated with possible Chinese espionage and spy activities on Canadian soil can also be applied to China’s increasing involvement in Canada’s energy and raw materials sectors. In his first trip to Asia since taking over for Jean Chretien in 2003, Prime Minister Martin met with Chinese Premier Wen Jiabao in January and signed several important bilateral agreements to develop uranium mines and oil reserves, particularly, the oil sand deposits of Alberta, Canada. Previously, the U.S. had identified Canada’s immense oil sand deposits as a key component in its energy policy for the future – that policy has now become irretrievably complicated.

 

Not satisfied with its accomplishments in the Canadian oil sector, China is also pursuing the country’s raw materials with a determined vengeance. The state-run China Minmetals Corporation made a nearly $7 billion proposal in 2004 to buy Toronto-based Noranda, Inc., one of the world’s largest copper, nickel and zinc miners. Regrettably for the Chinese, their pursuit of the Canadian mining giant was unceremoniously halted this month as a result of the announced $2.5 billion merger between Noranda, Inc. and its subsidiary Falconbridge Ltd.

 

The failure will not be well received in Beijing. But it does send an unmistakable message to Ottawa that the Chinese consider Canada a highly desirable investment option. Other Canadian companies on China’s wish list include Inmet Mining Corp. and Teck Cominco Ltd., both major players in the commodities industry.

 

Business investment and other opportunities aside, the unanswered question for many national security experts in Canada and the U.S. is whether China’s overseas strategy is motivated by more than money. Canadian Industry Minister David Emerson thinks so. He has already stated his concern that Chinese companies operating in Canada are not entirely “market motivated.”

 

Jim Stanford, an economist with the Canadian Auto Workers Union, is uneasy with what he sees as China’s infringement in Canada and the country’s policies in general: “China’s [economic] boom reflects a deliberate, semi-planned strategy to construct advantage in sophisticated industries with the help of powerful state interventions; subsidized capital; investments in infrastructure, a managed currency, and cheap and compliant labor.”

 

Developments in Canada become even more troubling when China’s increasing presence in the Western Hemisphere is considered. Chinese energy deals with Argentina, Venezuela, Brazil, and Ecuador portend a more aggressive Western strategy. In addition, Chinese military sales to Venezuela’s Hugo Chavez, its growing economic and political relationship with Cuba’s Fidel Castro, and its unprecedented participation in the UN peace-keeping mission in Haiti have given the consummate human rights violator entry into previously inaccessible regions. China continues to make powerful bilateral and trilateral alliances in the Western Hemisphere, using its newfound economic and military prowess as leverage.

 

The U.S. understands Canada’s desire to be ethnically and economically diverse. From a historical perspective, there is little doubt that Chinese immigration and investment have added to Canada’s economy, as well as America’s. The U.S. should continue its support of a well-reasoned Canadian immigration policy that is both inclusive and representative.

 

At the same time, Canada must be cognizant of the risks involved in the formulation and implementation of an inclusive economic foreign policy that permits unobstructed access to markets with national security significance. We live in a complex, interconnected world where the security decisions made by one country often affect the security decisions of its neighbors. As a neighbor and strategic partner in North American security, it would be imprudent for the U.S. to turn a blind eye toward a sudden influx of Chinese nationals over its northern border, given China’s recent behavior and past expressions of hostility toward U.S. democracy efforts.

 

Working closely with Canadian officials, the U.S. should adopt a North American China policy designed to monitor unusual business or governmental activities which may be related to state-sponsored espionage activities. This should not be viewed as a xenophobic or racist policy. It is neither anti-Chinese nor anti-Canadian. But beyond their stated goals of securing energy resources and increasing business opportunities in Canada, what are China’s other goals?

 

Finally, any discussion concerning a significant Chinese presence in Canada and the Western Hemisphere in general, must include the security of U.S. energy interests in Alaska and Canada. The possibility of coordinated, covert Chinese actions designed to disrupt U.S. oil deliveries and production will be greatly magnified during times of crisis. Denied oil from Alaska’s North Slope via the Trans-Alaskan Pipeline System (TAPS) and Canada’s daily allotment of crude oil, America’s ability to respond to global acts of aggression would be greatly reduced, placing strategic allies such as Taiwan, Japan and South Korea, as well as U.S. forces in the Pacific, at great risk.

 

In the face of international criticism, the Bush Administration must remain committed to a vigilant China policy. Under President Bush’s focused leadership, the U.S. has readily assumed the responsibility of carrying the torch of freedom, justice and democracy throughout the world. Taking a stand on issues of global and regional security may be uncomfortable for some, but it is in the best interests of the U.S. and the free world.


Fred Stakelbeck is a Senior Asia Fellow with Washington-based Center for Security Policy. He is an expert on the economic and national security implications for the U.S. of China's emerging regional and global strategic influence. Comments can be forwarded to Frederick.Stakelbeck@verizon.net.


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