Canada launches new Indo-Pacific strategy, focused on ‘disruptive’ China

OTTAWA (Reuters) – Canada on Sunday launched its long-awaited Indo-Pacific strategy, pledging more resources to deal with a “troubled” China as it works with the world’s second-biggest economy on climate change and trade issues.

The 26-page document outlined spending of C$2.3 billion ($1.7 billion), including to strengthen Canada’s military presence and cyber security in the region and tighten foreign investment rules to protect intellectual property and prevent Chinese state-owned companies from snapping up critical mineral supplies.

The scheme is to deepen ties with a fast-growing region of 40 countries that account for nearly C$50 trillion in economic activity. But the focus is on China, mentioned more than 50 times, at a time when bilateral relations have been frosty.

“China is an increasingly destabilizing global power,” the strategy said. “China aspires to shape the international order in an environment that is more lenient to interests and values ​​that increasingly deviate from us.”

Prime Minister Justin Trudeau’s liberal government wants to diversify trade and economic relations that depend heavily on the United States. Official data for September shows that bilateral trade with China accounted for less than 7% of the total, compared to 68% for the United States.

The strategy highlighted “foreign interference and Beijing’s increasingly coercive treatment of other countries.

“Our approach … is shaped by a realistic and clear assessment of China today. In areas of deep contention, we will challenge China,” she said.

Tensions escalated in late 2018 after a Huawei Technologies executive was detained by Canadian police, and Beijing later arrested two Canadians on espionage charges. All three were released last year, but relations remain strained.

Earlier this month, Canada ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security.

In a section referring to China, the document said Ottawa would review and update legislation that enables it to act “decisively when investments from state-owned enterprises and other foreign entities threaten our national security, including in our critical minerals supply chains.”

The document recognized significant opportunities for Canadian exporters and said cooperation with Beijing was necessary to address some of the “global existential pressures,” including climate change, global health and nuclear proliferation.

Goldie Haider, CEO of the Business Council of Canada, said it was important for the government to turn “aspirations into action and actions into achievements.”

The document said Canada would enhance its naval presence in the region and “increase our military engagement and intelligence capability as a means of mitigating coercive behavior and threats to regional security.”

Canada belongs to the Group of Seven major industrialized countries, which want to take important measures to respond to North Korean missile launches.

The document said Ottawa was engaging in the region with partners such as the United States and the European Union.

She said Canada needs to continue talking to countries with which it has fundamental differences, but did not name them.

($1 = 1.3377 Canadian dollars)

(This story has been corrected to fix the amount to C$2.3 billion from C$2.6 billion in the second paragraph.)

(Reporting by David Leungren). Editing by Denny Thomas, Leslie Adler and Daniel Wallis

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