Canada has Damaged their Relationship with China

Canada has Damaged their Relationship with China

The arrest of a top Chinese tech executive at the request of the US has snared Canada in the middle of a major international dispute involving Beijing and Washington.

Ottawa confirmed on Thursday that China had detained two Canadian nationals under what Beijing has said is suspicion of threatening its national security.

That came nearly two weeks after the arrest in Vancouver of Meng Wanzhou, the chief financial officer of telecoms giant Huawei, a move that infuriated Beijing.

The resulting crisis is to blame on “a trade war between China and the United States,” Fred Bild, a former Canadian diplomat and Asian studies professor at the University of Montreal, told AFP.

“Washington is using Canada in its trade battle with China,” he said.

The detention of the two Canadian nationals have fueled suspicions that China is retaliating against Canada’s arrest of Meng.

She was released on Can$10 million (US$7.5 million) bail by a court in Vancouver on Tuesday pending a US extradition hearing.

Beijing had warned of “grave consequences” if she was not immediately freed.

Bild points to the exceptional circumstances of her arrest, saying Washington has been content in the past to impose fines on foreign companies found guilty of violating US sanctions on Iran.

Meng faces up to 30 years in prison if convicted.

But US President Donald Trump said he could intervene in the US case against her if it helps seal a trade deal with China — statements that displeased Canada.

– ‘A pawn’ –

Trump’s comments have “really complicated” the situation for Canada, according to Bild.

“It’s sometimes difficult to persuade the Chinese that we are not acting on behalf of the United States. And this has reinforced notions that Canada is just a pawn.”

Canadian Foreign Minister Chrystia Freeland on Wednesday indirectly criticized the statements by the US president.

“Our extradition partners should not seek to politicize the extradition process or use it for ends other than the pursuit of justice and following the rule of law,” she told a press conference.

“Canada is caught in the middle of a China-US tech war,” said Paul Evans, a global affairs professor at the University of British Columbia in Vancouver.

The United States has been pressuring Canada for several months to ban Huawei equipment from its future 5G cellular networks over security concerns.

Washington fears that Beijing may use the technology to disrupt US military communications.

And the Trump administration sees a Huawei as a potential Trojan horse, a mistrust fueled by the fact that the group’s founder, Ren Zhengfei, is a former Chinese army officer. He is also Meng’s father.

Canada is the only member of the US-led Five Eyes intelligence alliance, which also includes Australia, Britain and New Zealand, that has not shut out Huawei from 5G rollouts, noted Bild.

The crisis comes as Canada’s holding of the rotating presidency of the Group of Seven industrialized nations comes to a close and as Ottawa looked to China to diversify its trade, which is now heavily reliant on the US market.

Instead of formally starting free trade talk with Beijing, Canada now faces threats of “trade sanctions,” according to state-run Chinese media.

Experts quoted by the Chinese tabloid Global Times, a mouthpiece of China’s communist government, also raised the prospects of a decline in the number of visits by Chinese tourists and businessmen to Canada.

Since Beijing approved Canada as a tourist destination for its citizens in 2010, the number of Chinese tourists has risen by 20 percent per year to almost 700,000 in 2017, and Ottawa hoped to double the figure by 2021.

“But for now, Canadians are standing alone at the edge of an abyss, with a Chinese noose around our necks and American shivs sticking out of our backs,” said an editorial in Canada’s National Post.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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