Rethinking an ever-more perilous relationship with China

Caught up in a dispute with China, Canada has plenty of reasons to re-evaluate the costs, most of them negative, of doing business with the authoritarian regime. That said, the time for the West to have avoided getting entangled with China would have been some 20 years ago, before the massive influx of cheap plastic crap and the technology boom that really enabled widespread spying and theft.

The spat touched off by the arrest of Hauwei’s Meng Wanzhou on behalf of the U.S., who have some damning legal grounds for indicting the executive and the company, shines a light on what is a most unhealthy relationship.

Leaving aside the trade imbalances – a big part of the U.S. rift with China just now – there remains a long list of concerns, including using the diaspora (including students) as spies, persistent cyber attacks, intellectual property theft, espionage, lobbying, currency manipulation, attempts to buy up foreign assets and related fraud. Not to mention the moral issues of dealing with an authoritarian regime willing to inflict its ill intentions on everybody, including its own people.

Of course, all of that is tempered by the desire for profit, which is what drives the likes of Walmart to outsource jobs there – some 400,000 between 2001 and 2013 alone – and to invest billions of dollars. Governments and corporations see the prospect of a huge market and instantly lose the ability to discern right from wrong – an affliction that goes well beyond China, of course.

Some companies are realizing that doing business in China has meant intellectual property theft, mandatory transfer of proprietary technology (subsequently stolen) and foreign ownership restrictions that are seldom matched back on home soil. The U.S. cites the value of intellectual property theft alone at US$225 billion to $600 billion annually.

But much like the hand-wringing over Saudi Arabia, though on a larger scale, profits and pervasive lobbying (i.e. spying and graft) are still holding sway.

Still, there is some growing realization of the threats.

“China remains the most active strategic competitor responsible for cyber espionage against the U.S. government, corporations, and allies. It is improving its cyber attack capabilities and altering information online, shaping Chinese views and potentially the views of U.S. citizens,” reads a recent U.S. intelligence report.

Though Donald Trump is no longer talking as tough as he once was – China’s efforts to flatter him have paid off – the U.S. president has made hay with his criticisms of Chinese trade policies – it’s a position that resonates with many of us.

If you gathered up all of the Chinese-made products in your home, dragged them out to the backyard and had a giant bonfire, chances are your house would seem much emptier. It’s also a pretty good guess your home would be safer. On the downside, the fire would release huge amounts of toxins into the environment, and earn you a not-so-friendly visit from the fire department and other officials.

There has been plenty of talk about offshore job losses as many companies set up shop in China. Add to that the environmental concerns due to that country’s lack of controls and the issue of buying items manufactured there becomes more than just the price tag. The question, then, is how much are willing to pay to buy from other sources?

Those of you who’ve been around long enough will remember when the label “Made in Japan” was both common and the sign of some low-cost, low-quality goods. Later, Taiwan was a frequent source. Today, of course, “Made in China” appears on a wide variety of products.

With a frequency that wasn’t seen from past imports, those Chinese-made goods are the subjects of health scares and product recalls. There’s a long list of unsafe toys (lead paint and other toxins, swallowing hazards) and even more dangerous foods (melamine, heavy metals, toxins). There have been scares involving toothpaste, pet food and unsafe tires.

Lax environmental standards and business practices in China have consumers increasingly worried.

Consumer groups have long advocated for governments to take a closer look at the rules governing the importation of Chinese-made goods. Right now, there are few real assurances that goods are safe.

The government often depends on the manufacturers to provide test data on their products, which is fine for reputable companies, but consumers don’t know who to trust. What’s more, federal officials have no power to order goods off the shelves, relying on the companies to issue the recalls.

While the government is unlikely to place a ban on Chinese-made products, or even the most risky categories of goods, Canadians can vote for change with their wallets.

Stop buying Chinese products and maybe they’ll change the way they do things.

That’s easier said than done, of course. We’re happy with the low prices that come from China’s lack of labour, environmental and safety regulations, even if manufacturers and retailers aren’t passing on the full savings they enjoy by doing business there.

Worse still, finding alternatives can be difficult. Certainly, much of the cheap plastic stuff you can find in dollar stores isn’t available from other sources. But even with larger items such as household goods, the Madein-China label is hard to avoid. It’s a conundrum even for those looking at the larger implications of trade with a country known for its poor human rights record, woeful environmental laws and unfair labour practices even as the now-slowing economy boomed.

There’s no question that Chinese economic growth is causing the Chinese to pollute their environment, but supporters of yet more trade hope that a richer economy will stir calls for better controls. Likewise, social inequality could be less pronounced as standards rise.

Still, it’s too early to tell which direction the Chinese will follow, whether it may someday follow the model of Asian neighbours South Korea, or the more egalitarian Japanese example. Perhaps the economy could end up more like Brazil’s, featuring a wealthy elite, a small middle class and a larger underclass – not a desirable outcome.

Equally unknown is how China’s military aspirations will play into its future, including its economic relationship with trading partners such as Canada.

Getting off the ride now will be more difficult than if money-grubbing companies hadn’t opened Pandora’s Box in the first place. That doesn’t mean we shouldn’t try.