‘We’ve been badly surprised’: Former ambassador David Mulroney on Canada’s changing relationship with China

This episode of Hub Dialogues features host Sean Speer in conversation with Munk School distinguished fellow and former Canadian Ambassador to China David Mulroney about Canada’s foreign policy in general and its relationship with China in particular.

They discuss Canada’s need to update our stance towards an increasingly aggressive China, why we should act more like Australia, and our declining respect for religious freedoms both in Canada and abroad.

You can listen to this episode of Hub Dialogues on Acast, Amazon, Apple, Google, Spotify, or YouTube. A transcript of the episode is available below.

Transcripts of our podcast episodes are not fully edited for grammar or spelling.

SEAN SPEER: Welcome to Hub Dialogues. I’m your host Sean Speer, editor-at-large at The Hub. I’m honored to be joined today by David Mulroney, who’s a Distinguished Fellow at the Munk School of Global Affairs and Public policy, a former Canadian Ambassador to China, and the Deputy Minister responsible for the Afghanistan Task Force. David is one of the most principled and thoughtful voices in Canada on foreign policy and the country’s national interests. I’m grateful to be able to speak to him about some of these issues. David, thanks for joining me.

DAVID MULRONEY: Great to be with you, Sean. Thank you.

SEAN SPEER: I moderated a panel this past weekend at The Canada Strong and Free Network conference on Canada’s place in the world. One of the panelists, David, said that she doesn’t think Canada has a foreign policy. Let’s just start there. Do you think Canada has a foreign policy? And if not, why not?

DAVID MULRONEY: Well, that’s a really great question. After I left government, I was so concerned about the fact that I didn’t think we had a foreign policy that I sat down and I ended up writing a book about where I thought it had gone. I think the problem stems out of a great Canadian advantage.

That is that we have to the south of us the most powerful country in the world and a country that is remarkably like us and with which we have a really close relationship. And because of the strength of the Canada-U.S. relationship has really in the past guaranteed our security and our prosperity and our wellbeing, our health as a society, which are the main things that you have a foreign policy for. And so what we thought of as foreign policy was a form of Canadian altruism. Canada doing good in the world, and there’s nothing wrong with that.

That’s to our credit, and we spent a lot of time building the network of international organizations and rules and the framework that has really governed the world since the Second World War, contributing mightily to that, but not really developing a foreign policy. And it’s becoming increasingly evident. I was worrying about it and noticing its absence increasingly at the end of my career and it’s become much more evident since then.

The real problem is with our diagnostic of the world. We tend to think that we act on the world and it receives this Canadian wisdom, and generosity, and good example, but we fail to appreciate that the world is increasingly acting on us. I am not a believer in inevitable American decline, but America is simply less capable of doing all those things for itself and for us and for all of its allies.

Canada is more the lonely middle power, and gosh, if you look over the last five or six years, in that time the government has decided that our foreign policy would be a feminist foreign policy and that we would do what we could around the world to empower women and to work for equality for women. Again, a very noble objective but that assumes, if that’s your main foreign policy, that nothing is going to surprise you in the world. That you can focus on that. We’ve been badly surprised. Think of our crisis with China, the Meng Wanzhou crisis and the kidnapping of two Canadians and the great economic and political pressure China put on us. Think of war in Ukraine, think of the pandemic.

You can be altruistic, but you also have to plan for threats to your security, threats to your economic prosperity, and threats to your wellbeing, your health, and I don’t think we did that. The absence of our foreign policy is beginning to hurt us and it is real.

SEAN SPEER: There’s so much there David from the description of our national interests to our changing relationship with the United States and of course the rise of China, and I promise we’ll come to all of those topics. But if I can just stay on this question of our foreign policy, or absence of our foreign policy, one of the arguments that you’ve made out elsewhere is that Canadian policymakers have effectively replaced a national interest-driven foreign policy with one that at least in part reflects domestic diaspora politics.

We’re seeing this play out in the context of the Conservative leadership campaign, in which Patrick Brown is essentially aiming to replace the party’s existing membership with new members based in large part on his policy promises relevant to certain immigrant communities. Why don’t you talk a bit about the rise of diaspora politics and what you think the policy consequences are?

DAVID MULRONEY: One of the things that, as you pointed out Sean, we’ve substituted for foreign policy is using Canada’s international activities and international relationships, the foreign travel of our leaders, as a stage on which to cultivate groups in Canada that are important to political parties. For example, most of my career was spent working on China and no trip to China could be complete without MPs from China, with delegations from China, and we would in high-level bilaterals regale Chinese leaders with stories of the diaspora.

A diaspora about which they are not particularly sentimental—the Chinese diaspora internationally is very big—nor would they necessarily see that as the sole topic of conversation, which Canadian leaders tended to see it as. And instead of pointing to the very real interests vis-à-vis China that all Canadians have relating to, again, our prosperity, relating to our security, relating to global governance, we tended to focus narrowly on what we thought of as the interests of a particular group.

What really worries me and bothers me about that is we treat a certain group of Canadians as somewhat hyphenated or as having an existence and that attracts countries that are inclined to interfere and that includes China, but it’s not excluded to China. The other countries, India in the past dabbling in Canadian affairs, I think, attracted by the obvious political importance of the diaspora, so it’s really a bad policy all around and one that we’re addicted to.

There are other countries—you look at Australia, look at the United States that have large diaspora populations—that factors to a certain extent in their international relations, but then they move on to other things. I’d be the fly-on-the-wall in bilateral meetings and you can see that point when your foreign interlocutor, the leader’s foreign interlocutor or the minister’s foreign interlocutor, realizes that Canadians don’t have anything else to say. It’s a nice friendly meeting, but it’s completely without substance. We’re addicted to this. It attracts foreign interference and it really mistreats and mischaracterizes people that we should be championing as Canadians.

SEAN SPEER: That’s a fascinating set of observations, David. Now let’s bring the conversation to China, which you’ve mentioned a couple of times. You have a long track record of working on China issues. I didn’t include them all in my introduction or it would’ve gone on for some time, but listeners will be familiar with your various roles, including of course, as ambassador.

You’ve been a critic of Canadian policy vis-à-vis China. It’s fair to say that you were a minority voice raising some of these concerns about Chinese interests and ambitions. What did you see that others didn’t and then secondly, as the rest of the world opens its eyes to China, why has Canada been slower in your view?

DAVID MULRONEY: I think part of the problem—and again, it has to do with that lack of foreign policy—we’re so locked into “send” mode that we’re not very good on “receive” mode. And it’s obvious, but the major story about China is its tremendous dynamism, the extent to which it is constantly changing and developing and evolving. We stopped noticing that and tended to think that the relationship as it was—when we were, I think, in 1970 ahead of the curve in recognizing the importance of China, the prime minister’s father, Pierre Trudeau took the step of recognizing China, when for example, the United States had not and China always thanked us for that—we thought that relationship was frozen in amber and that we’d always be this beneficent partner and the senior partner in the relationship when that changed. The other thing that happened and where I think the problem got turbocharged was around the time of the global economic crisis of 2008 and 2009, when China escaped the crisis through wise policy, through the size of its economy that was already connected globally, connected on which the world depended, and the rising tide of China’s economy helped a lot of us. A lot of boats floated because of China.

I watched Canadians come to China in those years and they tended to see the future, and it was China. They were dazzled by the cityscapes, by the airports, by the razzle-dazzle of China, and failed to look more closely at some of the persistent problems that China was facing. Also, I think failed to pay sufficient attention to the way China itself was changing in the way it dealt with us. I experienced that over time. That China, the relationship at a diplomatic level, changed long before it changed in a way that other Canadians would see it.

The Chinese were much tougher with us, much rougher with us. Their behind-the-scenes behaviour, their tendency to bully and to interfere, was evident long ago for those who had a front-row seat, day in and day out in the relationship. I was lucky enough to be one of those people, although it took me a while to fully understand the implications of that. In the last 10 years that has only increased. It has only increased because of the leadership of Xi Jinping, the current president and party leader and someone who has shown every indication of one who needs to stay in that position for some time.

I think he and those around him have seen that not only is China growing and increasingly important in the globe, but they feel that there is an absence of global leadership. That the United States is no longer the unchallengeable leader of the world, and that there’s an opportunity for China to play that role. We’ve seen a much more aggressive China. That’s happened at a time when Canada, I think, has been especially vulnerable. It’s been vulnerable because the current prime minister, the son of the prime minister who established that relationship, I think has never managed to get beyond his early naivete on China.

He very famously, before he became leader even, unfortunately, said that he admired their basic dictatorship. He’s repudiated that remark, but he’s done nothing since then, even as prime minister to reassure Canadians that he really truly is over it. For me, for example, the fact that he went to China to negotiate a progressive free trade deal and actually thought that he could persuade China to change its very society to be more like Canadian society strikes me as an example of his continuing naivete. His appointments as ambassador, John McCallum and Dominic Barton, were very worthy and distinguished individuals, but basically China promoters.

At a time when we needed to lessen our dependence on China and needed to step back, also suggests that to me. The most recent example that I still find shocking is the fact that in the midst of the pandemic, when it was obvious that China was using vaccine politics and the pandemic for political reasons, and when China was seeking to dominate us and coerce us, the idea that we proposed a vaccine partnership with China is astounding.

The results were inevitable because they cratered as it became clear that Meng Wanzhou was not going to be sent back to China anytime soon. That lingering naivete has happened at a time as China has become more aggressive globally and more aggressive in Canada. We’ve been more vulnerable than most. I don’t see any sign of that changing.

SEAN SPEER: Let’s just stay on this topic for one more minute. I’ll just be fascinated to hear your thoughts, David, on what you think is behind this instinct to draw towards China reflected in some parts of our politics and some parts of our business community. Is it primarily about economic opportunities? Is it a kind of inherent anti-Americanism? What do you think has been the allure of China reflected in parts of official Ottawa now for several years?

DAVID MULRONEY: I think both. You’ve touched on both. There is an element and a strong element of anti-Americanism because China offered to—and it’s not just Canadians, you see it in Europe, you might even, dare I say and it hurts me to say this as a Catholic, you see it in the Vatican—people see in China a future and a set of opportunities that isn’t in the United States and they naively believe that China would allow them—you could switch from an American bus to a Chinese bus without many consequences.

That’s a folly, but it’s a folly that many people have embraced. There’s also the money. Nobody knows us more than the Chinese. Part of it is what they call elite capture and that is offering people lucrative board memberships or contracts or revisits and things like that. Part of it is relentless optimism of all too many business leaders. I have described China’s leaders as CEO whisperers. They know what to say to you.

I’ve watched them do this. They’ll say, “I lead the largest country in the world, but you’re a major CEO and you have to take tough decisions. You’ve been successful, and we’ve been successful.” They have these folks eating out of the palm of their hands, and they woo them in. Unfortunately, some CEOs are not all that loyal to the democratic Western system when there’s a lot of money to be had. They woo captains of industry quite successfully, and then they tend to be very unreliable diplomatic and political advisors. There’s a lot of that.

I think the anti-Americanism is being tempered now finally by just how egregious China’s grab for power has been. Many people are being moved to the fence and then off the fence. But there is still some there, who I think sometimes like to see China score points at the expense of what they see as the United States, but is increasingly really the West and countries like Canada.

SEAN SPEER: Let me ask you about what the contours of Canadian policy vis-à-vis China ought to be? Listeners may be familiar with the notion of decoupling. Is that the right objective for Canadian policy or do we need something of a middle ground between fully extracting ourselves from the influence and potential control of China, on one hand, and foregoing these economic opportunities represented by China on the other hand? In other words, David, if there’s a spectrum here, where should Canada be on the spectrum?

DAVID MULRONEY: I think it should be intelligently self-interested, but that means a degree of decoupling. I think the first thing that has to be done is to move in a way that a country like Australia has moved to combat foreign interference, which is real. We’ve even seen and we have cause to worry that China has attempted to interfere in Canadian politics in the not-so-distant past. What Australia has done is they’ve simply made it a crime to work or act on behalf of a foreign government, either directly or through one of its proxy organizations, and not disclose it.

They said, “You can do this, but you have to be transparent about it.” This has had a profound effect in Australia. Just before this became law a couple of former senior politicians on their own decided that they would drop off the boards of Chinese corporations that they had been serving on. Move against Chinese interference in Canada as step one. Two, diminish our economic dependence on China.

We’ve seen products like canola, where our very success has been used against us. But not give up on the Chinese market because the long-term trend, and I want to say this carefully and I don’t want to sound as ghoulish as I might, but the long-term trend is we have what China needs, and we should never forget that. China may be punishing us from time to time on canola, but over the long term, given what’s happening with climate in China, what’s happening with soil and the availability of farmland, with water supply, is that China will increasingly depend on countries like Canada and Australia for its food supply.

We should be aware of that and be as generous, and humanitarian as possible, but also understand that it gives us some protection against some of China’s more egregious activities. We also have to think in terms of new allies and partnerships, all these kinds of things that are happening. We don’t tend to be in as many of them as the U.S., U.K., Australia. There’s a quad. There are things that we’re just not part of and I think we are tremendously loyal to the UN system. I think the UN system needs a hard second look, not to be abandoned but to be reformed. Perhaps, in some cases to be given less authority and importance than it does have in Canada. We need to look at new relationships.

And then the final thing I think we need to do is up to our China competence. At a time when China is posing increasing threats to Canada, now more than ever we need Canadians who understand China. One of the things I thought about is an elite China school for members of the public service across the board, not just foreign affairs, the military and other Canadians, where some people wouldn’t be studying full-time language, but they’d be in it for weekly or monthly sessions with some of the top China thinkers from around the globe in academics, in media, in business. But also others would be studying Chinese culture and politics and getting to know and understand the Chinese system.

I was surprised when I was ambassador that the only senior member of the Canadian forces who came to China was, to his credit, then Chief of the Defense Staff Walter Natynczyk but there were no other exchanges. I’m not suggesting that we have exchanges with the People’s Liberation Army for naive reasons but to understand how they operate and what drives their thinking, where our vulnerabilities might be.

There are areas of climate, global food supply, and, God knows, global health—Canada has been hit very hard by two pandemics that have come from China in SARS and now COVID. We need to stay close on things like that. There are lots of Chinese academics and there are lots of Chinese specialists that we can benefit from and need to hear from, but we also need to know where we shouldn’t be cooperating with China. In the past, we’ve had this idea of comprehensive engagement.

I don’t mean to punish ambassador John McCallum but he would end some of his speeches by saying “Gèng duō! gèng duō! Even more, let’s do more.” That’s not what we need. We need selectivity and some of the problems we’ve seen in the federal public service where they’ve done boneheaded things like approving Chinese technology for screening machinery in our embassies because they were the low bidder, would not have happened if simply in the federal public service there had been a directive to say, “If it says China right now ask your boss, get a second opinion. Let’s think about this. Not every idea is a good idea.”

What happens in the federal public service is—I used to joke about this, horrify myself by joking about it—when people would talk about China’s strategy, what they meant was getting every department and agency in Ottawa, in say 2011 a time when everybody was gaga about China, to put their China project on the table, then you’d wrap a big ribbon around it and say, “This big undigestible mass is our China policy.”

China policy should have maybe four or five objectives and they should be achievable. They should be measurable. They should be high level. They should be built into ministers’ letters from the prime minister’s mandate letters and Canadians should be aware of how we’re doing. We also can’t be afraid to talk about China. This government for all its China naivete, and perhaps because of it, has been remarkably afraid of talking about China to Canadians. We still don’t know what’s happening with our 5G system and where Huawei stands.

I think we can see what the trend is but no one’s saying that right out loud. We’ve moved from having a China policy being developed to having an Indo-Pacific policy. I think that’s a way of saying, “We’re actually not going to focus as much on China but we’re just not going to talk about it.” China’s not going away. Having an Indo-Pacific policy won’t remove the challenges. I think Canadians will be much more reassured to have a prime minister say to us, “Look, there are some problems here and if we face a foreign policy crisis, it could well come from an aggressive and assertive China and we’ve seen some of this.”

If you look at the Meng Wanzhou crisis, when she was arrested in Vancouver and held on a U.S. extradition request, what was happening there was an example of increasingly assertive attempts by China to erode our sovereignty and our autonomy. Because what they were saying was, “No, Canada, don’t think that your extradition treaty with your closest ally, the United States, applies for people that we consider to be princes and princesses in our system, elite Chinese citizens. So you better not do that. That would be an erosion of our autonomy.”

What’s really shocking about that was for me was how many senior Canadians were willing to go along with that. There was a moral fatigue in Canada that worries me. We can get a China policy. We can re-energize the Department of Foreign Affairs. We can reform the military. We can refocus the security agencies. But it takes an act of will. It takes self-confidence. It takes moral energy. I think those are in low supply. I think I can understand some of the reasons for it. You can’t have a foreign policy, you can’t navigate in terms of the world, if you don’t know where you are. We’ve lost—as many countries have—we’ve lost our sense of that. We’re mired in doubt, we’re mired in internal divisions. It’s very hard to navigate from that point to a destination that you hope to arrive at. We’ve got to get our own act together before we can get our foreign policy together. I guess I’m becoming more pessimistic about that to be very honest, Sean.

SEAN SPEER: That’s a very thoughtful answer, David, I have a few more questions for you, but just on the point you make about the inner relationship between our own domestic political culture and how we project those values and priorities in the world, last year I went back and read George Kennan’s long telegram. What struck me is that it was as much about the American culture and society as it was about its the country’s relationship with the Soviet Union. Even in that case, leading experts were encouraging policymakers to focus as much inward as they were outwards. Those are really thoughtful observations.

DAVID MULRONEY: You think about that and then think about the puzzling thing that the prime minister said to The New York Times that Canada was the first post-industrial society, that there was no core identity in Canada. I’m not so sure about a core identity, but a shared sense of purpose, and of achievement, and faith in some of our most basic institutions I think is a prerequisite.

We lack that, although you wouldn’t know it sometimes smart foreign policy, in particular, our development policy, because when I talked in the past about altruism—I think we’ve moved from altruism to, and it’s been described by some people in recipient countries as ideological colonization, where our development policy is really using, cutting checks to, and we’ve spoken openly about this, to transform countries in the developing world and primarily in Africa to be more like Canada.

I think at the time that this was announced they even said we have to challenge beliefs and laws that don’t accord with this, even if they’re the beliefs and laws of the country. In a strange way, and in a very sad way, we’re doing in our foreign policy today in our development policy, what we now acknowledge we did through residential schools. We’re changing other cultures because they’re not enough like us. You’d think that we’d be hypersensitive to that.

This is another example of not listening. We’re only in delivery mode. We’re telling these countries what they’re going to get from Canada. We’re not asking them what they need or what they’d like. We’re not bothering to show respect for their own cultures and their traditions. We’re going to change them. That is unsettling.

SEAN SPEER: David, I mentioned the panel session that I participated in last week. One of the panelists, Marcus Kolga, who you no doubt know, argued that Canada ought to place fundamental values at the centre of its foreign policy, even if it comes at the cost of our economic interests. You served as Ambassador of China as we’ve discussed, how did you deal firsthand with those trade-offs and how should Canada manage them in general?

DAVID MULRONEY: That’s one of the hardest things to deal with in foreign policy that you need to understand, you need a wise pragmatism to understand that the world is a very diverse place and not everybody does things the way we do them and you can’t change everybody. You have to have—there are limits to that. While we should be modest in terms of our expectations of changing China, and I talked about that, what I thought was foolish of the prime minister to think he could change China into a progressive state, through a free trade negotiation.

Things like China’s unimaginable cruelty in Xinjiang and Tibet should give us pause and cause us to change, to withdraw, to impose sanctions, that’s certainly a step too far. You have to have standards. You acknowledge diversity, but you accept the fact that there are global standards and that’s where institutions like the UN, like the charters relating to human rights and crimes against humanity, become important. It’s important that everybody is held accountable or countries like China get a free pass. The fact that we attended the Olympics, for example, at a time when China has more than a million Uyghurs in prison, it’s accused and stands accused, credibly accused, of things like forced sterilization and abortion, of kidnapping people, of intimidating Uyghurs in Canada. It was, to me, shameful that we participated, and we did it for all the wrong reasons.

You need to be pragmatic, but you have to have a handle on values that are not just Canadian values, that are global values, and that’s not easy. Jacques Maritain, the French philosopher, who spent some time at the University of St. Michael’s College, which is an institution I know well, was one of the drafters of the Universal Declaration on Human Rights. He said that even in those post-war years, it was difficult to get everybody to sign on to that list, but he said, “We got it done.” I would hang on to that list of human rights as tightly as possible, and never give up on that because I think I believe that there are universal human rights and the way to keep them relevant is to stand up for them when they’re threatened, even by countries like China.

SEAN SPEER: Let me ask you about one of those, David. We had Michael Ignatieff on the podcast a couple of months ago. He was implicitly critical of the Trudeau government’s decision to eliminate the Office of Religious Freedom in the Department of Foreign Affairs on the grounds that part of Canadian foreign policy ought to be advancing and promoting the principle of religious freedom. As a foreign policy expert and a person of faith, why do you think that religious freedom is something that Canada ought to champion in its foreign policy?

DAVID MULRONEY: Precisely for that reason, because it is a basic human right and it’s something that is shared globally. The other reason is that religious freedom has never been, at least as threatened now as it has ever been. If you look at China, in my direct experience, where Muslims in Xinjiang, Tibetan Buddhists, Protestants, and Catholics throughout the country, are under great pressure. If you look at Pakistan, where violence against minority religions and Christians, in particular, in Africa, across Nigeria, it’s horrific in the Middle East.

I’ve been tremendously disappointed that the Office of Religious Freedom was dismantled. At the time, the government said, “Well, we’re going to blend it in with other human rights that are also important.” That was sort of a subtle shift that I saw within the department when the office was announced. It was as if people were saying, critics within the department and later within the new government, that religious people were getting an extra cherry by having their freedoms protected, and that somehow this was taking away from others.

The way it was phrased in the department, which is a pretty secular organization, was, “Oh, we’re having an Office for Religious Freedom. Does that mean that we’re going to defend atheism?” I said, “Well, I’ve been working in China and I think atheism is pretty well defended there. I don’t think it needs much support, but why can’t we also support those Chinese people who aspired quite naturally to express their beliefs and live their faith?” I’ve been disappointed.

I’d also have to say though that what’s worried me even more is that closing the Office of Religious Freedom isn’t the only signal that this government has given that it is less than preoccupied with religious freedom. You think back to the inexplicable speech that the former Governor-General gave in which he mocked Canadians of religious faith. When the prime minister was asked about it, he rallied to the defense of the Governor-General, whose name he sent to Buckingham Palace, and not to Canadians of religious faith.

There have been other indications that the religious beliefs of Canadians have not been given much concern. Most troubling to many, myself included, was last summer with the arson against churches. I think it’s often the case that it isn’t just a problem out there, and our inability to deal with it out there is because we’re not dealing with it very well here. I worry about that.

One of the things that I’m interested in—I’ll be meeting with some folks in Ottawa next month on this topic of religious freedom, and how young people of faith can give their gift of service to Canada, Canada built in part by people of religious faith. Drive through any Canadian city, and look at the hospitals, and the schools, and things like that, you’ll see that legacy.

When I talk to young people now, they don’t feel, for example, that a role in politics is open to them anymore. That worries me. It’s a problem that we need to address by something other than saying you’re right. You don’t have the right beliefs. You can’t be part of the political system. Before we even deal with it abroad, we need to take a good solid look at ourselves at home. I worry about that.

SEAN SPEER: I would just point out for listeners interested in these topics that David and I are speaking on May 9th. Today we’ve published an excellent article by Ray Pennings from Cardus, raising concerns about new DND guidelines around the role of the chaplaincy in the department, which is another example of the decline of, or the marginalization of, religious voices in our public square.

David, if I can wrap up with a final question, you’ve been so generous with your time. I just want to ask you about China, looking forward. You know more about that country than virtually any other Canadian policy expert. There’s a prevailing assumption in much of our policy and political discourse that China’s poised to eclipse the United States as the world’s dominant superpower. Yet at some fundamental levels, as you said earlier, there are a lot of problems in Chinese society, including but not limited to, its low fertility rates and aging demographics. If you were to score things, what is the health of Chinese society? Is it the powerful player that it positions itself as, or is it fundamentally weaker than that?

DAVID MULRONEY: I watched the Kentucky Derby over the weekend. I always watch the Kentucky. I’m not a gambler or horse player, but I love watching the Kentucky Derby. Sometimes there are horses that get off to a slow start and then have a tremendous stretch through the middle of the race but don’t have what it takes to finish. I think that’s the challenge that China faces.

In my time working on China, I was witness to this burst of creative energy and entrepreneurial energy and technological sophistication that has positioned China at the top of so many indicators of global success. At the same time it faces, I mentioned the environmental problems, how north China is now basically a desert, soil pollution is at a critical level, air pollution of course is at a critical level.

You also have problems in terms of the Chinese economy, and its failure to make a transition to an economy that is more balanced and less subject to the boom and bust cycles. We’re seeing the end of a boom cycle and we’re getting into a bust cycle when it comes to real estate. This problem of demographics is really serious.

It’s certainly exacerbated by the one-child policy and how that was imposed. I always think of China as I think of Europe, that you can have a policy that’s outlined with a lot of sophistication in Beijing, but by the time it gets to distant provinces, it’s like going from Brussels to the edge of the Black Sea. People will read things differently and give them effect differently.

While in some cases people were able to moderate the ill effects of the one-child policy, they were brutally imposed in other places. China’s getting older. There are more disabled senior citizens in China than there are Canadians on the planet already. The problems of eldercare.

There’s also a psychological challenge and barrier coming for China. That is the day, and it’s not far off, when the Chinese wake up and see that India is a bigger country than they are. China looks down on India and it is scathing often in what it says. Of course, China and India are nearly at war from time to time in the high Himalayas. China has always sensed that its success and its dynamism is due to its population. When it cedes first place to India, maybe in the next decade, it will be a tremendous psychological barrier.

It’s an aging society. As has been said, Japan got rich before it got old. China is getting old before it gets as rich as it thinks it needs to be. The biggest problem I think, though, is the problem of the communist party itself. Now we have Xi Jinping, who is undoing the leadership succession protocols that were arrived at, through great struggle and hardship, but to the great satisfaction and pride of the Chinese political class. Where basically you had an orderly succession where the leader was in place for 10 years. Then by that time, his successors would be apparent, and you’d have the next level of leadership emerge. Xi Jinping isn’t giving up.

He has been engaged in a long-running campaign against corrupt officials, but also his enemies in the system. What happens when you ditch the retirement plan is that you can’t retire because you’ve made so many enemies. You’re in mortal peril if you do.

In the Chinese communist system, no system lasts forever. The Chinese say there is no banquet that never ends. Although the Chinese communist party has had an amazing run, it’s had its centenary, but at some point there has to be political reform in China. The machine can’t run forever and Xi Jinping is testing the machine as it’s never been tested before.

I don’t think China’s going to implode in the near future, but I think it will become increasingly shaky, increasingly unpredictable, and increasingly difficult for its citizens and for its neighbours in the world. Which brings me back to my original idea that we need a smart China policy and we need to up our China competence. It’s in our Canadian interest and it’s key to a successful Canadian foreign policy.

SEAN SPEER: Well, for those listeners who’ve stayed with us for this whole conversation they’ve, no doubt, upped their China competency. David Mulroney, Distinguished Fellow at the Munk School of Global Affairs and Public Policy, thank you for joining us at Hub Dialogues.

DAVID MULRONEY: Thank you so much, Sean. Great to talk to you.

View original article here Source