China’s emboldened foreign policy escalates to hostage diplomacy with Canada


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Chloe Marriott


Canadian businessman Michael Spavor has narrowly avoided spending over a decade in a Chinese prison after being caught up in Beijing’s ‘hostage diplomacy’. Spavor was recently convicted of national security and espionage crimes by a Chinese court in a decision that was widely condemned by foreign leaders. While China strongly denied ulterior motives, it has become clear that the move was in retaliation for the arrest of Chinese technology giant Huawei’s CFO, Meng Wanzhou in 2018. Meng was arrested in Vancouver pursuant to a US extradition warrant, which left Canada in the middle of an intensifying Cold War between the two global superpowers. Spavor’s arbitrary detention and the arrest of Meng contributed to a severe deterioration of Sino-Canadian relations. While the diplomatic row appears to be over, the ongoing implications are yet to be seen and the damaged relations between the two states are far from repaired.


Arbitrary detention as a political bargaining tool


Michael Spavor is a Canadian business consultant who operated a cultural exchange enterprise that promoted investment and tourism in North Korea. On 10 December 2018, Spavor was detained alongside fellow Canadian and former diplomat Michael Kovrig on the vague suspicion of national security crimes. This suspiciously came just days after the arrest of Chinese citizen and Huawei CFO Meng Wanzhou on 1 December 2018 in Vancouver. Meng was placed under house arrest in Canada on a US extradition warrant for charges relating to financial fraud, money laundering, conspiracy to defraud the United States, obstruction of justice, and violating Iranian sanctions that were also listed against Huawei and two of its subsidiaries.

In May 2019, Spavor was formally charged by the People’s Procuratorate of Dandong for "spying on and illegally providing state secrets.” In line with China’s 99 per cent conviction rate, Spavor was unsurprisingly convicted of “the crime of spying and illegal provision of state secrets abroad” on 11 August 2021 and subsequently sentenced to 11 years in jail, confiscation of 50,000 yuan (AUD $10,548) and deportation. The series of hearings leading to his conviction were closed in what Beijing described as an effort to protect national security. But Ottawa criticised these actions as demonstrating a “lack of transparency in the legal process” and failing “minimum standards required by international law”. The timing and vague nature of Spavor’s charges were nothing short of suspicious, inviting criticism for being ‘politically motivated’. Canadian Prime Minister Justin Trudeau was open in his criticism of China’s “[use] of arbitrary detention as a tool to achieve political goals”.


Canada’s key priority in relation to China over the past three years prioritised has been securing the safe return of citizens arbitrarily detained. Ultimately, Beijing’s steadfast demands led to a deal between Canada, China and the United States on 24 September 2021 to release Meng pursuant to conditions of a deferred prosecution agreement that outlined a requirement to take “responsibility for her principal role in perpetrating a scheme to defraud a global financial institution”. Both Spavor and Kovrig were released shortly after on “medical grounds”, after spending over 1,000 days in arbitrary detention.


With corporate criminal charges and a global ban still pending against Huawei, further retaliation should not be ruled out. Meng’s release suggests this is likely to be resolved in the near to medium term but Beijing’s actions may be similarly indicative of a deepening rift between the two states. Correspondingly, the perceived success of Beijing’s hostage diplomacy may provide a warning to other nations who do not align their behaviour with the superpower’s interests. Scholars have likened the behaviour to that of a “medieval kingdom” as opposed to a modern day superpower, which is setting a dangerous precedent for future interaction.


Impact on Sino-Canadian relations


China and Canada have maintained a constructive relationship since the 1970s, relative to most western states. These strong ties have consistently been challenged by China’s rise and came to a major crossroads due to the Meng debacle. Both states recognised the strain this affair placed on Sino-Canadian relations when the new Canadian ambassador to China, Dominic Barton, was appointed in September 2019. While representatives from both sides indicated a need to improve relations, Chinese foreign minister Gen Shuang went on to berate Canada for their “wrongdoing” with Meng, stating that “the responsibility lies completely with the Canadian side” and once again demanding Meng’s release.


A vicious back and forth dialogue ensued and continued to damage Sino-Canadian relations, leaving citizens in the crossfire. In addition to the detention of Spavor and Kvorig following Meng’s arrest, four Canadians have been sentenced to death in China over drug charges in a move that was viewed by many, including Canada’s foreign minister, as another attempt by Beijing to pressure Ottawa for Meng’s release. Beijing also effectively banned the importation of agricultural products from Canada, including canola, blocked beef, pork products and various produce, which has left a gaping hole in the export market for Canadian farmers.


Ottawa similarly criticised Beijing, albeit in a significantly more subtle and diplomatic manner, via parliamentary activism. Trudeau took strong action against Beijing’s repressive national security law in Hong Kong by suspending its extradition treaty with the province, labelling the law a “significant step back” for freedom. The Canadian House of commons similarly labelled Chinese treatment of Uyghur Muslims in the Xinjiang region as ‘genocide’ in a move that angered China further. This was supported by similar moves from the US, UK and EU, who placed sanctions on Chinese officials for these human rights abuses.


In his attempt to counter China’s aggressive approach, Trudeau was criticised for his ‘soft’ and restrained approach towards diplomacy by seeking balance and denouncing China’s actions without any solid retribution. Opting to engage with Beijing over the last three years rather than outwardly criticising has facilitated some cooperation. However, as China has clearly demonstrated they do not intend on accepting Western political and economic standards, Ottawa has lost focus on pursuing a distinct strategy. Domestic pressure for Trudeau to start aggressively pushing back against China is growing stronger, but realistically this won’t have substantial influence unless like-minded states follow suit and stand against China’s aggressive campaigns.


What is the role of the US?


In a comparative approach towards managing an increasingly dominant China, the United States has adopted a policy of ‘strategic competition’. Consistent back and forth clashes between the two superpowers have frequently left Canada caught in the middle with no escape. Ottawa’s close relationship with Washington has attracted hostility from Beijing, particularly in regard to the G7’s announcement of a global infrastructure plan to rival the Belt and Road initiative as well as NATO’s increasingly tough stance on China challenging the current rules-based international order. Being drawn into a controversy not of its own making, the Meng case has demonstrated Canada’s strong commitment to the rule of law, but this position has not come without costs. US President Biden has reiterated former President Trump’s hard-line stance on China’s assertiveness and has committed to reinvigorating the US-Canada relationship to present a united front.


The United States has stated the agreement for Meng’s release was not compromising due process, expressly denying the deal was a ‘prisoner swap’ of any kind. Stressing the independence of the Justice Department, press secretary Jen Psaki confirmed the deal has ‘zero impact’ on US foreign policy and attitudes towards China. It may be a precursor to show the US and China are more willing to cooperate and reach other long-awaited agreements such as an updated free-trade deal. This collaboration would similarly be a major step to start the process of rapprochement between China and Canada.


The future of Sino-Canadian relations


Spavor’s arrest and conviction extended Beijing’s “punitive campaign against Canada” in response to the arrest of Meng Wanzhou. The future of Sino-Canadian relations is far from predictable. It appears China will continue to relentlessly utilise hostage diplomacy as long as it helps achieve its objectives. Following Trudeau’s election victory last month, Ottawa faces an uphill battle navigating the intensifying Cold War between the US and China without becoming collateral damage.


However, ensuring a long-term relationship can be maintained may require a more balanced approach from Canada. Effectively managing China as a middle power requires give and take on shared interests as opposed to a narrow focus on trade and human rights issues. Canada may benefit from diversifying trading partners throughout the Indo-Pacific to reduce the impact of Chinese backlash, but economic decoupling is unrealistic.


There are various issues that raise the potential for mutual gain via collaboration, including joint action on climate change and the economic recovery from COVID-19. China is no longer ‘biding its time’ but has fully exerted its influence globally. Canada is also not the first country to face political coercion from China, but there is little precedent in circumstances where innocent human lives are at risk. Trudeau has recognised the broader threat this type of activity poses to Canadian allies and the broader international community. How Ottawa adapts its China policy and ongoing conflict may become a blueprint for future hostilities with Beijing.



 

Chloe Marriott is currently studying a Bachelor of Laws (Hons) and a Bachelor of Global Studies at Monash University in Melbourne, Australia and has engaged in study abroad programs at the University of Leeds (United Kingdom) and Monash University Malaysia. Chloe is the Young Diplomats Society's regional correspondent for East Asia and holds a strong interest in the future of global leadership and the cultural and historical complexities of the region.


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