OTTAWA, Nov 27 (Reuters) – Canada launched its long-awaited Indo-Pacific strategy on Sunday, outlining C$2.3 billion ($1.7 billion) in spending to boost military and cyber security in the region and vowed to deal with a “disruptive” China while working with it on climate change and trade issues.
The plan detailed in a 26-page document said Canada will tighten foreign investment rules to protect intellectual property and prevent Chinese state-owned enterprises from snapping up critical mineral supplies.
Canada is seeking to deepen ties with a fast-growing Indo-Pacific region of 40 countries accounting for almost C$50 trillion in economic activity. But the focus is on China, which is mentioned more than 50 times, at a moment when bilateral ties are frosty.
Four cabinet ministers at a news conference in Vancouver took turns detailing the new plan, saying the strategy was crucial for Canada’s national security and climate as well as its economic goals.
“We will engage in diplomacy because we think diplomacy is a strength, at the same time we’ll be firm and that’s why we have now a very transparent plan to engage with China,” Foreign Minister Melanie Joly said.
Prime Minister Justin Trudeau’s Liberal government wants to diversify trade and economic ties that are overwhelmingly reliant on the United States. Official data for September show bilateral trade with China accounted for under 7% of the total, compared to 68% for the United States.
Canada’s outreach to Asian allies also comes as Washington has shown signs of becoming increasingly leery of free trade in recent years.
The document underscored Canada’s dilemma in forging ties with China, which offers significant opportunities for Canadian exporters, even as Beijing looks to shape the international order into a more “permissive environment for interests and values that increasingly depart from ours,” it added.
Yet, the document said cooperation with the world’s second-biggest economy was necessary to address some of the “world’s existential pressures,” including climate change, global health and nuclear proliferation.
“China is an increasingly disruptive global power,” said the strategy. “Our approach … is shaped by a realistic and clear-eyed assessment of today’s China. In areas of profound disagreement, we will challenge China.”
Tensions with China soared in late 2018 after Canadian police detained a Huawei Technologies executive and Beijing subsequently arrested two Canadians on spying charges. All three were released last year, but relations remain sour.
Canada earlier this month ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security.
The document, in a section mentioning China, said Ottawa would review and update legislation enabling it to act “decisively when investments from state-owned enterprises and other foreign entities threaten our national security, including our critical minerals supply chains.”