Editorial. May 1, 2020 On Canada's relations and trade with China,
We have been harshly reminded that Globalization offers Canada and other countries NO security. The world's concentration of factories in CCP China has been a dismal failure. An irrational, short sighted delusional period for democracies and other countries as well. Smaller sustainable factories at home, with the most advanced automation that no longer boast cheap mass labor or even proximity to large markets can be a reality. Globalization promises need not lure Canada into unenforceable agreements with an unethical regime who will even profit from a pandemic originating from it, let alone threaten to force its neighboring countries into giving up their hard earned democraticfreedoms.
Canada, “Consumer Nation at a Crossroad” , May 1, 2020
A Taicanada.com, Premiere Article
Will is rarely enough, Its tragedy like war or disease that compels humans to change habits. The voices that we hear at that moment of change are many, ultimately its compulsion that drives which path we follow. In an epidemic driven economic recession we are reliant on our leaders to compel that change.
Covid19 infected many and affected us all at a time when the Canadian economy was already in decline. Multiple years of low energy prices had already decimated the Alberta economy. One that had effectively been Canada’s major positive in a global trade balance that is increasingly negative because of large trade deficits with China. Our shopping and buying held the economy up, Canadian personal debt has soared.
Now the Honorable Justin Trudeau promises a “New Normal” to follow the epidemic short term support benefits. Its a catch phrase that Canadians’ hopes now cling to, without knowing what it is. We know that an unprecedented commitment is needed by Canadians, similar in urgency to the lock-downs to return our country to a producer state , one not only consuming foreign goods. Looking back to the years of Nortel , RIM, Corel and Bombardier there is evidence that Canada had the potential in IT, but lost it.
No less is needed than experienced industry leaders sequestered with government until a reliable, financially sound and trustworthy international recovery strategy can be found. As did President Obama engage American leaders to save the economy after the 2008-2009 financial crisis its time for Canada. Our answers are not with Amazon and and other supply chain gurus. That cannot be Canada’s “New Normal”, simply based on consumer side globalization while ignoring meaningful production employment . Such guidance would leave Canada tied to the “Old Normal” . There is good reason why American politicians and business leaders see Amazon in the same context as banks too big to fail. One has to appreciate the employment difference between production and consumption. Most of Amazon products are Made in China if one can find it in the fine print.
Without experienced Canadian industry leadership planning the needed retraction from outsourced China manufacturing based relations there will be no “New Normal” for Canadians. The “Old Normal” of consumerism, personal debt and living pay check to paycheck or click to click reselling items online would continue. Canada cannot rely on our consumer habits to change unless under compulsion . Canadians will continue to live in the shadows of foreign real estate speculators and those few millionaires well connected to the actual overseas producers in China upon which the supply chain depends.
As an example CCM used to make great bicycles right here in Canada, that’s what their brand name said. Canada Cycle and Motor company. The bikes were virtually indestructible, I know as, I tried to destroy mine a number of different ways, just ask family. CCM like many iconic Canadian companies went under in 1983. Procycle Group of Canada located in Quebec took over the bikes. It pushed out its 7th million by 2002 . Now its website shows some high end bikes, some with epower and those at a price difficult to afford for most starting at around $5,000 Cdn. With global bicycle sale growth more than twice that of automobiles, China produces more than 90% of bicycles sold in the USA with Canada’s stats likely similar. Sure Canada is a market of only 10 million bikes versus 450 million in China but even making those 10 million bikes in Canada would be worth billions to the Canadian economy with rewarding jobs plus we have all the materials needed.
Canada calls hockey its game . One wouldn’t know it looking at where the $200 plus carbon fiber hockey sticks and pricey Canadian brand name equipment are made. The billions made from hockey sticks and equipment carried by our youngest, our sensational Canadian women to the lucrative endorsements by our Professional athletes virtually all come from China. Our youth are no longer growing up proud of their Made in Canada brand. In the past youth could hedge their dream of a professional NHL career with a possible future in Engineering. If we aren't producing anything, engineers are not needed. Maybe some will be lucky enough to play a few glamorous games overseas in Beijing or Shanghai, but nothing will be left for the majority of Canadians.
Yes Canada has blundered terribly in its romance with China, there is no getting around it. We and our next generation will pay badly for it, more even then many of our youth dead from Fentanyl on the streets already have. Retracting our manufacturing from China and taking the courageous steps to resurrect critical companies like Nortel as an example to deliver secure 5G for Canadians will be an International challenge not unlike a War. Are Canadian Leaders up to the real New Normal they promise or is locking down an entire country and handing out benefits, the limit of our capacity to act urgently.
China now has possession of production facilities for many of our iconic Canadian brands. As any lawyer will remind you, ownership is 9/10 of the law. To make things worse any law in China is subject to arbitrary CCP party whim, our illegally imprisoned can attest to that. Fortunately China’s hourly wages, add to that the real Canadian social costs for unemployment and welfare is closer to Canadian wages than ever before. Money spent to employ Canadians producing something in a field other than our energy , legal, accounting and supply chain services does offer a "New Normal"
Canada though has few levers to pull. The Northwest passage for shipping more China goods is interesting but what does it provide in meaningful employment. China is already hedging their bets at free transit by buying up struggling mineral properties. Our favorable international GDP to debt ratio is primarily from our oil, gas and coal industries. We are otherwise a small player to China, who holds all the cards. The CCP also feels confident Canadians will endure even extortion like the 2019 Canola embargo designed to rescue Huawei’s Meng Wanzhuo from American justice . The moment Canada set its factories in China it forfeited whatever Brand Intellectual Property it might have had along with any control. The past is done, just as China will never pay international reparations for all Covid19 Virus wrongful deaths and economic loss they chose not to prevent. The CCP will use every means to undermine ownership and any reimbursement to Canadian companies who now have hostage factories in China but effectively limited control. This is all a very hard pill Canadians must swallow, and one that cannot be solved through negotiations or legal recourse. There is only a very slight chance Canada may try to offset the needed manufacturing relocation costs with the historic reparations now owed by China for its negligent containment failure.
For Canada to retract from China to at least return our country to self-sufficiency will be the challenge for our next generation. We can help start it and at this stage of life, I can likely only write about it. We can leave our descendants clean air, the freshest water on this planet but sadly we are leaving behind a legacy of painfully expensive China Relations that started with Justin Trudeau’s wonderful father. Times have since changed . At that time PET's diplomacy was well intended, but was also much to the dismay and chagrin of Reagan and our closest American neighbor. Canadians cannot afford this idealism which has sadly continued to bring suffering and unemployment. Canada is neither the first nor the last country to be taken advantage of by CCP's China. Until the Chinese people in China find a way for an elected choice of their government not an imposed surveillance controlled hostile state, laws will remain arbitrary. The impotence of free nations to influence the CCP or even being heard cannot be our collective capitulation to this ideology, nor add to its support. As Winston Churchill remarked " I tell you it is no use arguing with a Communist. It's no good trying to convert a Communist or persuade him"
As well as acknowledging the poor choices we have made, Canada will also have to recognize that we no longer have the depth and scale of high tech knowledge nor the organizational resources to keep up. It will be our choice of foreign partners that will decide our capacity to produce and engage in fair and ethical foreign joint ventures. Else we can just keep getting suckered in by China. Fortunately Canada also has access to highly skilled technical resources overseas in democratic countries like Taiwan , Korea, India and Japan. These are countries we can count on assisting us to collaboratively and ethically retool Canadian manufacturing. Despite its Nationalistic ambitions China does not define Asia. Taiwan is a showcase for Canadians on the promise of the possible for us. If a country like Taiwan with no natural resources can grow into roaring tiger on the sheer strength of its citizens’ hard work to become a model of automated manufacturing success then Canada has this potential. It only has to be unleashed by leaders willing to break their bad habit of turning to China.
The message that Trump delivered at his last United Nations address had many delegates laughing. His comments about globalization and international bodies like the W.H.O. that play favorite to China is now ringing in the ears of every country leader. Sadly, it took a pandemic for countries to wake up and realize that many are no longer in control of their own ship. Globalization has worked well for the producing countries but Canada is not one and missed that part. While going off the grid in Alaska might work for some folks it’s not the solution for most of us and our next generation.
Japan, has been a model partner with Canada in terms of locating their car manufacturing plants in Canada to balance with our employment needs. Taiwan essentially built the IT sector in China through firms like TSMC, FoxComm and ChiMei Industries. Taiwan shares a common basis of democracy, law and IP protection, so these nations are a natural choice as partners for Canada as is India. With limited land on the island, Canadian manufacturing plants with Taiwan offices and expertise makes sense for both parties. Inherently that would mean being a partner in their National Security along with the UN recognition this valuable friend so richly deserves. Korea also remains a long standing champion of democracy in Asia with a highly resilient population willing to put their lives on the line to maintain a free homeland. Although they have also made some conscientious choices to support Canadian jobs in the automotive sector, do we see LG or Samsung plants here in Canada. Perhaps more work in this area can follow.
Canadian workers can not remain at home indefinitely , after Covid19. Canadians will need meaningful work and the travel, tourism and retail sectors will see challenges for years. The sooner our National leaders acknowledge their historical failure as it pertains to China relations and commit themselves to change the sooner our country can get on a path towards self-sufficiency. We will need through modern automated plants in Canada not in China. The “New Normal” has to be a real partnership between Canada and Nations they can trust. The alternative is grim rerun if we follow the familiar well sodden trail relying on the uncomplicated business of selling of our natural resources and farm products. Stay on this road and we or the next generation will find ourselves at this same fork in the road with a lot less monetary reserve. In the worst case a lot more Canada brand names will have hostage factories and there will only be more jobs for Chinese in China that belonged in Canada. Can Canadian leaders do more than just envision a day when the economics of automated factories is not an argument for outsourcing to China but an argument to locate sustainable smaller efficient factories here for NA consumers to make sure we will always be self-sufficient.