Canada to boost defence, cyber security in Indo-Pacific policy, focus on ‘disruptive’ China

By David Ljunggren and Ismail Shakil

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.

CHALLENGE CHINA

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.”

“Because the region is both large and diverse, one size
definitely does not fit all,” Canadian Chamber of Commerce
President Perrin Beatty said in a statement, adding that
Canada’s priorities will need to be very nuanced both between
and within countries.

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

Canada belongs to the Group of Seven major industrialized
nations, which wants significant measures in response 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.

Canada needed to keep talking to nations it had fundamental
disagreements with, it said, but did not name them.
($1 = 1.3377 Canadian dollars)
(Reporting by David Ljunggren; Editing by Denny Thomas, Leslie
Adler, Daniel Wallis and Mark Porter)