Ottawa: After years of tensions and a broader trend of Western diversification away from the world's No. 2 economy, experts say Canadian officials are getting tougher on economic ties with China, their second-largest after the United States. is a business partner.

While Ottawa is taking a more cautious approach to investment and important economic partnerships with China, trade is expected to remain stagnant as each side relies on the other.

According to Yun Sun, director of the China program at the Washington-based Stimson Center, "It does not mean that they will end their relationship with China." But it does mean that they want to be more cautious and careful about the consequences.

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Canadian Foreign Minister Melanie Jolie has recently cautioned domestic businesses against expanding their trade ties with China because of political concerns, and Ottawa has ordered three Chinese companies to stop investing in lithium mines linked to Canadian security interests. has ordered.

Later in October, Canada announced its intention to join the US-led Indo-Pacific Economic Framework Alliance, which is seen as a check on China's economic might.

After carefully mending fences with Beijing for several years, the Canadian government appears to signal a potentially tougher stance toward Beijing, according to Vincent Rigby, senior adviser at the Washington-based Center for Strategic and International Studies.

A Hydro-Québec employee was recently accused of espionage by Canadian police who believe they were collecting trade secrets for China. According to a statement from the business, the suspect was a researcher who studied battery materials. Canada considers the battery to be strategically important.

The Canadian government blocked a Chinese company from buying an Arctic gold mine two years ago, citing safety concerns.

Lama Khodar, a spokeswoman for the government's Global Affairs Canada, announced last month that Ottawa was no longer abiding by the free-trade agreement with China.

The deal is listed as "under consideration" on the Chinese Ministry of Commerce website after "broad consensus" to investigate the deal's feasibility in 2017.

Zhao Lijian, a spokesman for the Chinese Foreign Ministry, claimed that Jolie's warning was baseless and called it an intrusion into domestic affairs. Ministry spokeswoman Mao Ning said on Thursday that China is not responsible for recent misunderstandings with Canada.

According to Victor Gao, vice president of the China and Globalization Center in Beijing, Chinese investors complain about a "lack of sufficient explanation" about the sanctions imposed by Canada on national security grounds.

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Gao said why Canada would increase scrutiny of its businesses is somewhat of a mystery to China.

Despite hopes of a correction, Zhang Zhiwei, president and chief economist at Pinpoint Asset Management in Shanghai, said "policy uncertainty remains quite high."

Analysts argue that the United States is helping Canada move away from China and that Canadian officials are finding it easier to cooperate with President Joe Biden on the matter than with his predecessor, Donald Trump.

"Maybe they follow Biden more because Trump was perceived as more extreme," according to Edwin Lai, associate director of the Center for Economic Policy at the Hong Kong University of Science and Technology.

The US and other Western countries are concerned about national security issues as well as over-reliance on trade with China.

In 2018, US officials launched a trade conflict with China by imposing tariffs on $500 billion worth of Chinese goods. Beijing claims that some Chinese tech companies are a threat to its national security.

A diplomatic dispute between China and Australia has resulted in tariffs on a number of Australian exports.
China's zero-Covid policy is still causing supply-chain disruptions, which is causing concern in the West.

Rigby, who also serves as a visiting professor at the McGill University School of Public Policy in Montreal, said Canada is moving more in the direction of the tougher stances taken by its allies, such as the US and Australia.

The decline in Sino-Canadian relations shows no signs of "normalizing anytime soon," according to Stephen Nagy, senior fellow at the Macdonald-Laurier Institute think tank in Ottawa. According to Nagy, Canadian officials may struggle to formulate a "rational China policy" and instead experience a "strange cold coexistence".

Tariffs have also been imposed on a number of Australian exports as a result of a diplomatic dispute between China and Australia.
The zero-Covid policy in China is still disrupting the supply chain, which is worrying the West.

Rigby, who also holds the position of visiting professor at the McGill University School of Public Policy in Montreal, observed that Canada does appear to be moving more in the direction of the more aggressive positions taken by its allies, such as the US and Australia.

Sino-Canadian relations have deteriorated, and Stephen Nagy, senior fellow at the Macdonald-Laurier Institute think tank in Ottawa, says there are no signs that they will "normalise any time soon."

Nagy asserts that Canadian policymakers might find it difficult to formulate a "rational China policy" and may instead encounter "awkward cold co-existence."

Meng Wanzhou, the finance chief of Huawei Technologies, was placed under house arrest by Canada from 2018 to 2021. Michael Kovrig and Michael Spavor, two Canadians who had been held for nearly three years on suspicion of spying, were released by Beijing after Meng was granted permission to return to China.

Nobody should anticipate that events will simply return to normal as if nothing happened, according to Sun. "A living reminder of the kind of power China is, and the kind of coercion it is willing to resort to to get its way when things don't agree," she said of the political cases for Canada.

The "two Michaels" alleged espionage case led Canada to reject the free-trade agreement, according to Jeremy Paltiel, an emeritus professor of political science at Carleton University in Ottawa.

According to Nagy, exporters in western Canada want to continue sending raw materials to China even though national officials are keeping an eye on how Beijing treats the country's ethnic minorities with a view to limiting engagement.

According to estimates from the University of Alberta's China Institute, measurable effects of China on Canada's GDP likely exceed US$55 billion.

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According to customs data from Ottawa, Canada exported a total of C$28.84 billion (US$21.62 billion) to China last year, an increase of 14% from the previous year. China receives mainly coal from Canada. Last year, China shipped goods worth US$51.51 billion to Canada, the majority of which was machinery, electronics, and electrical equipment.