Big Trou­ble in Lit­tle B.C.

CHINA Bri­tish Columbia wants closer busi­ness ties with China, but the su­per­power’s rise has prompted con­cerns. How much of a threat does Beijing re­ally pose to this prov­ince?

BC Business Magazine - - Contents - by Ng Weng Hoong

This prov­ince can't es­cape China's in­flu­ence, but crit­ics who blame the eco­nomic gi­ant for a host of other ills could be ig­nor­ing its real threat

As he moves to con­sol­i­date power at home, Xi Jin­ping is sow­ing doubt abroad. From Asia to North Amer­ica, other coun­tries were al­ready ques­tion­ing the mo­tives of an in­creas­ingly as­sertive China. Now Pres­i­dent Xi’s war on cor­rup­tion—a key jus­ti­fi­ca­tion for ex­tend­ing his rule in­def­i­nitely at last March’s Na­tional Peo­ple’s Congress—has cre­ated a new China threat for busi­ness part­ners and even po­lit­i­cal al­lies.

Beijing re­cently ar­rested sev­eral ty­coons who con­trolled global em­pires, in­clud­ing An­bang In­surance Group chair and CEO Wu Xiao­hui. Un­til their down­fall, th­ese bil­lion­aires were the face of the new China, build­ing in­ter­na­tional re­la­tion­ships to help Xi re­al­ize his vi­sion for the Belt and Road Ini­tia­tive (BRI). The BRI is China’s Us$1-tril­lion effort to link the economies of Asia, the Mid­dle East, Africa and Europe, and key ports in Asia, the Arc­tic and the Amer­i­cas.

In Canada, ti­tan An­bang owned a sta­ble of as­sets that the Chi­nese gov­ern­ment re­port­edly seized af­ter Wu’s con­vic­tion on fraud and em­bez­zle­ment charges. Among them: B.c.-based se­niors care chain Re­tire­ment Con­cepts and Van­cou­ver’s Ben­tall Cen­tre of­fice com­plex. An­bang paid roughly $1 bil­lion for Re­tire­ment Con­cepts in 2017, and the four Ben­tall tow­ers have a sim­i­lar value. While Wu is ap­peal­ing the con­vic­tion and an 18-year jail sen­tence, Cana­dian stake­hold­ers re­main in the dark. (Pa­cific Reach Se­niors Hous­ing Man­age­ment, which op­er­ates Re­tire­ment Con­cepts, did not re­spond to a re­quest for an update.)

For Bri­tish Columbians, th­ese events have only cre­ated more anx­i­ety about China, which faces wide­spread mis­trust, even from coun­tries ea­ger to share in its vast wealth. B.C. seems to want it both ways: while court­ing Asian mi­gra­tion and in­vest­ment to strengthen its trade-de­pen­dent econ­omy, the prov­ince is fan­ning fears of a la­tent Chi­nese men­ace to Cana­dian so­ci­ety.

An­bang isn’t the only Chi­nese com­pany that has been shop­ping in B.C. Last year, over com­plaints that Ot­tawa skipped a full na­tional se­cu­rity re­view, Shen­zhen­listed Hytera Com­mu­ni­ca­tions Co. bought Rich­mond-head­quar­tered satel­lite man­u­fac­turer Nor­sat In­ter­na­tional. Mean­while, China Min­sheng In­vest­ment Group, a Shang­hai-based pri­vate firm launched by the Chi­nese gov­ern­ment, ac­quired a 40-per­cent stake in the Grouse Moun­tain ski op­er­a­tion near Van­cou­ver.

More re­cently, U.S. law­mak­ers warned that Chi­nese smart­phone maker Huawei poses a se­cu­rity risk to Canada and its al­lies. Their com­ments fol­low a Globe and Mail in­ves­ti­ga­tion show­ing that Huawei has been de­vel­op­ing its su­per­fast 5G wire­less tech­nol­ogy with help from UBC and other Cana­dian uni­ver­si­ties.

Then there’s B.C. wine­maker John Chang, who has been im­pris­oned in China since 2016.

Be­sides those news sto­ries, the me­dia churns out alarmist tales that put Chi­nese mi­grants and their off­shore money at the heart of Metro Van­cou­ver’s growing list of prob­lems: un­af­ford­able hous­ing, money laun­der­ing, or­ga­nized crime and the opi­oid cri­sis. One out­landish re­port even links Chi­nese gam­blers with fi­nanc­ing for al­leged Ira­nian ter­ror­ism.

China hasn’t taken all of this crit­i­cism sit­ting down. In a 2015 in­ter­view with the Globe, Liu Fei, the na­tion’s con­sul gen­eral in Van­cou­ver, blamed Cana­dian reg­u­la­tors, not off­shore buy­ers, for the city’s out-of­con­trol real es­tate prices.

Charges of Chi­nese malfea­sance are far more se­ri­ous now than dur­ing the first half of the 20th cen­tury, when B.C. was a hot­bed of anti-asian sen­ti­ment. Back then, rather than high­light the role of Chi­nese im­mi­grants in Canada’s creation, the prov­ince’s politi­cians and press ac­cused them of tak­ing jobs from white work­ers and im­port­ing an alien cul­ture to un­der­mine the young coun­try’s Euro­pean char­ac­ter.

To­day, in­flu­en­tial voices openly state that Chi­nese Cana­di­ans could be work­ing for Beijing to in­fil­trate Canada’s po­lit­i­cal of­fices, cor­po­ra­tions and uni­ver­si­ties to fur­ther the cause of the moth­er­land.

THE CHINA QUES­TION Where does all of this leave Bri­tish Columbians on China? Di­vided and fear­ful, ob­servers say.

Bill Tiele­man, 61, has never been to China, nor does he want to visit. The Van­cou­ver-based po­lit­i­cal con­sul­tant is im­pressed but not moved by what is ar­guably one of the great­est trans­for­ma­tions of a ma­jor coun­try within a gen­er­a­tion. Over the course of Tiele­man’s life, China has risen from the ashes of Chi­nese Com­mu­nist Party founder Mao Ze­dong’s dis­as­trous poli­cies of the 1950s to lift a third of its 1.3 bil­lion peo­ple out of poverty and as­sume its cur­rent role as global su­per­power.

Tiele­man sees it dif­fer­ently, es­pe­cially af­ter re­ceiv­ing death threats in 2008 for call­ing for a boy­cott of Chi­nese prod­ucts. Com­mu­nist China has evolved from a back­ward to­tal­i­tar­ian state into a mod­ern “bizarre bas­tardiza­tion of Western cul­ture, cap­i­tal­ism, au­thor­i­tar­i­an­ism and en­vi­ron­men­tal degra­da­tion,” he main­tains.

“The Chi­nese peo­ple de­serve much bet­ter than this,” the NDP sup­porter says over cof­fee. Worse, he asks, what if other de­vel­op­ing coun­tries adopt the China model, which com­bines po­lit­i­cal re­pres­sion and en­vi­ron­men­tal de­struc­tion with the pur­suit of eco­nomic growth at all costs?

That as­sess­ment has growing sup­port across the po­lit­i­cal spec­trum. The con­ser­va­tive gov­ern­ment of U.S. Pres­i­dent Don­ald Trump calls China a ma­jor threat in its lat­est Na­tional Se­cu­rity Strat­egy and World Trade Or­ga­ni­za­tion com­pli­ance re­ports. Even Trump’s bit­ter­est op­po­nents on the left agree. Demo­cratic Se­na­tor El­iz­a­beth War­ren de­scribes Amer­ica’s decades-long pol­icy on China as “mis­di­rected” for hav­ing failed on hu­man rights while al­low­ing the out­flow of U.S. tech­nol­ogy and knowl­edge to aid the rise of its new Asian strate­gic ri­val. For the Euro­pean Union, China’s ap­petite for tech and in­fra­struc­ture com­pa­nies adds to the trad­ing bloc’s growing list of com­plaints about un­fair Chi­nese trade prac­tices and dif­fi­cult busi­ness con­di­tions for for­eign firms.

Asian coun­tries, in­clud­ing those friendly to China, sus­pect the geopo­lit­i­cal am­bi­tions of Pres­i­dent Xi, who re­cently abol­ished the two-term limit that would have seen him leave of­fice in 2022. Combined with his oust­ing and sidelin­ing of po­ten­tial ri­vals, this move paves the way for Xi to be­come ruler for life, os­ten­si­bly so he can make China the world’s most pow­er­ful coun­try.

THE LIM­ITS OF PRAG­MA­TISM B.C.’S po­lit­i­cal, busi­ness and aca­demic elites have long pushed for closer ties with China. Ar­gu­ing that Canada has lit­tle choice but to en­gage the new­est great power, they also sought a piece of the fast-growing Chi­nese mar­ket to re­duce over­re­liance on the U.S. But Cana­di­ans re­main wary of, even hos­tile to, the idea that China might ex­ert more in­flu­ence on their so­ci­ety through a Faus­tian ex­change for eco­nomic growth. Most sur­veys show that the pub­lic prefers the slow and cau­tious road to en­gage­ment.

Cana­di­ans deeply dis­trust the Chi­nese po­lit­i­cal sys­tem, ac­cord­ing to a poll re­leased last Oc­to­ber by UBC’S School of Pub­lic Pol­icy and Global Af­fairs. Only 36 per­cent of re­spon­dents held a favourable view of the coun­try. The 57 per­cent with an un­favourable view saw China through the lens of re­cent threats: ris­ing hous­ing un­af­ford­abil­ity, in­dus­trial es­pi­onage, cy­ber­at­tacks, job in­se­cu­rity and chal­lenges to Cana­dian val­ues. The re­main­ing 7 per­cent were un­de­cided.

“China will re­main a source of ap­pre­hen­sion and anx­i­ety,” says Paul Evans, an in­ter­na­tional relations ex­pert at UBC, who de­signed the sur­vey with po­lit­i­cal

“At this stage, Canada does not have a China or Asia

pol­icy. Ot­tawa doesn’t even have a for­eign pol­icy. Our band­width is taken up by our re­la­tion­ship with the U.S. The NAFTA ne­go­ti­a­tions have trumped ev­ery­thing” –Paule­vans,i nsti­tute of Asian re­search, UBC

sci­ence pro­fes­sor Xiao­jun Li.

Mak­ing things worse is what Evans sees as Ot­tawa’s lack of di­rec­tion in its for­eign pol­icy. “At this stage, Canada does not have a China or Asia pol­icy. Ot­tawa doesn’t even have a for­eign pol­icy,” says the pro­fes­sor at the In­sti­tute of Asian Re­search, where he serves as in­terim re­search direc­tor. “Our band­width is taken up by our re­la­tion­ship with the U.S. The NAFTA ne­go­ti­a­tions have trumped ev­ery­thing.”

As much as Cana­di­ans fear China, wor­ries over the North Amer­i­can Free Trade Agree­ment help ex­plain a surge in their sup­port for ne­go­ti­at­ing a bi­lat­eral free trade agree­ment (FTA) with the coun­try: 69 per­cent of the UBC sur­vey re­spon­dents were in favour. Even tak­ing method­ol­ogy dif­fer­ences into ac­count, this rep­re­sents a big jump from sur­veys by Van­cou­ver-based think tank the Asia Pa­cific Foun­da­tion of Canada, which found that, in 2014 and 2017, only 36 per­cent and 55 per­cent of Cana­di­ans, re­spec­tively, sup­ported an FTA.

But a deal re­mains a long way off be­cause Canada’s fo­cus on hu­man rights, labour and na­tional se­cu­rity is­sues will pre­vent a full blos­som­ing of eco­nomic ties with China. Even for busi­nesses that sup­port a closer re­la­tion­ship, China presents a for­mi­da­ble bar­rier, start­ing with cul­tural and lan­guage dif­fer­ences. Ac­cord­ing to fed­eral agency Ex­port De­vel­op­ment Canada, Cana­dian firms are most worried about China’s opaque le­gal sys­tem, lack of in­tel­lec­tual prop­erty rights pro­tec­tion and ris­ing labour costs.

THE VALUE OF CHI­NESE TRADE AND IN­VEST­MENT What’s at stake for the Cana­dian econ­omy? From 2008 to last year, trade be­tween Canada and China grew by an av­er­age of 5.3 per­cent an­nu­ally, ac­cord­ing to Sta­tis­tics Canada, from $44 bil­lion to nearly $74 bil­lion. But over the same decade, as the Chi­nese econ­omy quadru­pled in size, Canada’s ex­ports to China merely dou­bled, to $27.3 bil­lion. Despite the lure of China’s huge and growing mar­ket, Canada re­mains ad­dicted to the U.S., which ab­sorbed 75 per­cent of its ex­ports last year.

More telling is the plunge in Chi­nese for­eign di­rect in­vest­ment (FDI) in Canada, from a peak of nearly $21 bil­lion in 2013 to $7 bil­lion last year, ac­cord­ing to the China In­sti­tute at the Univer­sity of Al­berta (CIUA).

CIUA direc­tor Gor­don Houlden, a pro­fes­sor of po­lit­i­cal sci­ence, cau­tions that Canada would suf­fer if it stopped re­ceiv­ing Chi­nese FDI. “Not hav­ing ac­cess to Chi­nese cap­i­tal will be a strong neg­a­tive for the Cana­dian econ­omy,” Houlden says, point­ing out that China needs to rein­vest the world’s largest for­eign ex­change re­serves, which now stand at more than US$3 tril­lion. “Given that we’re a cap­i­tal-im­port­ing coun­try, that we have a mas­sive ter­ri­tory and a small pop­u­la­tion, it will have a ma­te­rial ef­fect on the value of our as­sets.”

With­out fresh cap­i­tal, Cana­dian as­sets across the board will de­cline in value, pre­dicts Houlden, whose 36 years as a China watcher in­clude post­ings as a Cana­dian diplo­mat in Beijing and Hong Kong. Chi­nese FDI is also im­por­tant be­cause it cre­ates op­por­tu­ni­ties for Cana­dian ex­ports, he ex­plains: “FDI brings mar­ket know-how and ac­cess to what will soon be the world’s largest econ­omy.”

Ul­ti­mately, less FDI will weaken the Cana­dian econ­omy and lead to lower liv­ing stan­dards. But that isn’t Canada’s only worry. Cap­i­tal is flee­ing the coun­try’s in­creas­ingly un­com­pet­i­tive and unattrac­tive busi­ness en­vi­ron­ment, the chief ex­ec­u­tives of BMO Fi­nan­cial Group and Royal Bank of Canada told the Cana­dian Press in re­cent in­ter­views.

As the Cana­dian econ­omy slows down over the next few years, and relations with Trump’s Amer­ica re­main un­cer­tain, China will come into sharper fo­cus. Canada’s need for eco­nomic di­ver­si­fi­ca­tion, es­pe­cially to­ward Asia, is hap­pen­ing just as Xi’s China as­serts it­self. For Canada, will the China ques­tion be­come the China threat?

CHINA’S TRUST DEFICIT Xi’s gov­ern­ment has been praised for tak­ing on more in­ter­na­tional re­spon­si­bil­i­ties and de­fend­ing the global free trade sys­tem, but it’s also en­coun­ter­ing un­prece­dented dis­trust from friendly coun­tries that once wel­comed closer po­lit­i­cal and eco­nomic ties with China. Aus­tralia and New Zealand sent shock­waves around the world last year with an­gry ac­cu­sa­tions that Beijing has been in­ter­fer­ing in their do­mes­tic pol­i­tics. Asian and African na­tions that have re­ceived sub­stan­tial Chi­nese in­vest­ments and loans won­der if their in­de­pen­dence is at risk from fur­ther ex­po­sure to the world’s sec­ond-largest econ­omy.

Canada is ahead of the pack in de­vel­op­ing China anx­i­ety syn­drome. In 2013, state-owned China Na­tional Off­shore Oil Corp.’s (CNOOC) Us$15.1-bil­lion pur­chase of Cal­gary-based Nexen was nearly scup­pered by Cana­di­ans who be­lieved Beijing would end up con­trol­ling their coun­try’s oil and gas in­dus­try. Those fears have

turned out to be un­founded. In fact, Nexen share­hold­ers prof­ited hand­somely when they sold near the peak, leav­ing CNOOC with a huge pa­per loss.

Nexen’s ghost has re­turned in the form of hos­tile ques­tions over state-owned Chi­nese firm CCCC In­ter­na­tional Hold­ing’s (CCCCI) pro­posed $1.5-bil­lion takeover of Cana­dian con­struc­tion firm Ae­con, which the feds blocked this past May.

Op­po­nents such as one-time Cana­dian Se­cu­rity Intelligence Ser­vice of­fi­cials Richard Fad­den and Ward El­cock have warned that Beijing is seek­ing a role in Canada’s in­fra­struc­ture-build­ing pro­gram to spy on Cana­di­ans and to steal their coun­try’s tech­nol­ogy. Howard Bal­loch, a for­mer Cana­dian am­bas­sador to China, called th­ese al­le­ga­tions “spe­cious” and “silly” in a Fi­nan­cial Post commentary.

Teck Re­sources is an­other Cana­dian com­pany that has found it­self on the de­fen­sive over its China ties. In 2016, the Van­cou­ver­based min­ing gi­ant ap­pointed for­mer Chi­nese gov­ern­ment trade of­fi­cial Quan Chong, then a mem­ber of the Na­tional Peo­ple’s Congress of China (NPC), to its board.

Crit­ics called Chong a po­ten­tial se­cu­rity threat who would look out for China’s in­ter­ests at Canada’s ex­pense. Teck coun­tered that his ap­point­ment would help the com­pany bet­ter un­der­stand Asia, es­pe­cially China’s mar­ket for nat­u­ral re­sources.

Two years on, in re­sponse to ques­tions about Chong’s per­for­mance, the com­pany in­sists that it made the right de­ci­sion. “Mr. Chong’s knowl­edge of China and in­ter­na­tional trade makes him a val­ued mem­ber of our 15-per­son board,” Teck spokesman Chris Stan­nell says, de­scrib­ing China as an im­por­tant mar­ket. Chong is no longer an NPC mem­ber with the ex­piry of his term at the start of 2018, Stan­nell adds.

So, why would China want to harm Canada, and, if so, how?

“That’s the thing. What ex­actly are we talk­ing about?” asks Yuen Pau Woo, B.C.based leader of the In­de­pen­dent Sen­a­tors Group in the Cana­dian Se­nate. “When I read about al­le­ga­tions of Chi­nese in­fil­tra­tion, I’m al­ways puz­zled by the lack of speci­ficity re­gard­ing the type of in­fil­tra­tion and in­flu­ence that China is sup­pos­edly prop­a­gat­ing,” says Woo, for­mer pres­i­dent and CEO of the Asia Pa­cific Foun­da­tion of Canada.

When a for­eign in­vestor pro­poses to ac­quire a Cana­dian firm, Woo as­serts, the deal should be as­sessed on whether it serves Canada’s in­ter­ests. “We should take each case in­di­vid­u­ally, and be very clear about what kinds of threats we con­sider un­ac­cept­able,” he says. “We should not dis­crim­i­nate against Chi­nese com­pa­nies sim­ply be­cause they are Chi­nese com­pa­nies or be­cause they’re state-owned en­ter­prises.”

In an in­ter­view with Bcbusi­ness be­fore Ot­tawa nixed the Ae­con deal, Yu Shan­jun, eco­nomic and com­mer­cial chief of the Chi­nese con­sulate in Van­cou­ver, called CCCCI’S pro­posed takeover “a nor­mal busi­ness deal be­tween two en­ter­prises which should not be politi­cized. The con­cept of ‘na­tional se­cu­rity’ can­not be bound­lessly ex­tended to serve as tool of trade pro­tec­tion­ism.”

Al­though Canada has ev­ery right to sub­ject merg­ers and ac­qui­si­tions to se­cu­rity re­views, Yu said his gov­ern­ment wants Chi­nese en­ter­prises to be treated fairly.

Sup­port­ers of the Ae­con deal claimed it would make the con­struc­tion com­pany more com­pet­i­tive and give Cana­dian firms a chance to bid on China’s BRI projects. While the Chi­nese em­bassy in Ot­tawa was pro­mot­ing the BRI in a se­ries of events in Canada last year, a Rich­mond wine­maker was lan­guish­ing in an un­known jail in China. John Chang and his wife, Al­li­son, of Rich­mond­based Lulu Is­land Win­ery were ar­rested in Shang­hai in March 2016. She has since been freed, but he re­mains in­car­cer­ated.

In an email, Chang’s lawyer, Daniel Brock of Fasken Martineau, said he was not at lib­erty to dis­cuss the case. In his last pub­lic state­ment, in May 2017, Brock de­nounced the cou­ple’s ar­rest as “in­con­sis­tent with in­ter­na­tional trade law.” For his part, Yu hinted that this is not a straight­for­ward com­mer­cial dis­pute as por­trayed in news re­ports.

While Chang’s in­no­cence or guilt re­mains to be proved, the pro­longed lack of in­for­ma­tion about the case and his re­ported poor health have been a pub­lic relations disas­ter for China, adding to the trust deficit it suf­fers with Cana­di­ans.

Despite th­ese con­cerns, B.C.’S year-old

Beijing’s power to dis­rupt the global op­er­a­tions of Chi­nese com­pa­nies adds a new di­men­sion to the China

threat by putting more busi­nesses, big and small, at risk of be­ing caught up in Pres­i­dent Xi’s an­ti­cor­rup­tion crack­down

NDP– Green Party gov­ern­ment is step­ping up its ef­forts to ex­pand trade and in­vest­ment ties with China. In May, Min­is­ter of State for Trade Ge­orge Chow an­nounced a re­newed fo­cus on Hong Kong (see p.32), which is set to grow in im­por­tance, given Beijing’s plan to ex­pand the hin­ter­land around one of the world’s lead­ing ports. With the rise of the so-called Greater Bay Area, en­com­pass­ing Hong Kong and the main­land cities of Guangzhou and Shen­zhen, B. C. ex­pects to build on the $200 mil­lion worth of in­vest­ments it has at­tracted from Hong Kong busi­nesses over the past five years, Chow says. In 2017, B.C.’S ex­ports to Hong Kong rose 12 per­cent, to $221 mil­lion. The prov­ince’s Hong Kong trade of­fice is hop­ing to at­tract in­vest­ments in B.C. from firms in the Hong Kong re­gion spe­cial­iz­ing in tech­nol­ogy, min­ing, farm­ing, seafood and re­search.

If the trade of­fice at­tracts more Chi­nese in­vestors to B.C., how will the prov­ince deal with Metro Van­cou­ver’s al­ready stretched hous­ing sup­ply? Will the fo­cus on tech­nol­ogy and re­search in­vest­ments in­crease the risk of Chi­nese es­pi­onage and in­tel­lec­tual prop­erty theft in Canada?

Ac­knowl­edg­ing that the NDP- Green gov­ern­ment “doesn’t have a good han­dle” on the hous­ing chal­lenge, Chow says his fo­cus is on boost­ing trade and in­vest­ment to cre­ate busi­ness op­por­tu­ni­ties and jobs for Bri­tish Columbians. His min­istry’s role is to pro­mote B.C. as a hub by pro­vid­ing in­for­ma­tion, fa­cil­i­tat­ing meet­ings and ex­plain­ing the prov­ince’s busi­ness en­vi­ron­ment and reg­u­la­tions to in­vestors, he notes.

On na­tional se­cu­rity, Chow says Ot­tawa must pro­vide the “lead­er­ship” be­cause it’s the fed­eral gov­ern­ment’s re­spon­si­bil­ity to screen com­pa­nies for po­ten­tial threats. “It’s not some­thing that we in B.C. can man­age,” he ad­mits. “It’s some­thing that we have to man­age as a na­tion to­gether with the fed­eral gov­ern­ment.”

THE DI­AS­PORA THREAT Beijing’s power to dis­rupt the global op­er­a­tions of Chi­nese com­pa­nies adds a new di­men­sion to the China threat by putting more busi­nesses, big and small, at risk of be­ing caught up in Pres­i­dent Xi’s an­ti­cor­rup­tion crack­down. As B.C. learned from its deal­ings with An­bang Group, in­ter­na­tional com­pa­nies with Chi­nese part­ners and coun­tries court­ing FDI from China will be ex­posed to Beijing’s abil­ity to ar­rest key ex­ec­u­tives.

“Xi Jin­ping is not a pol­icy wonk,” says Willy Lam, the first China watcher to blow the whis­tle on the 65-year-old leader’s plan to ex­tend his stay in of­fice. “His knowl­edge of fi­nance and eco­nom­ics is very lim­ited.”

There’s also no guar­an­tee that Xi will win the war on cor­rup­tion, an en­demic prob­lem through­out China’s long his­tory, ob­serves Lam, an ad­junct pro­fes­sor at the Chi­nese Univer­sity of Hong Kong and a se­nior fel­low at the Wash­ing­ton-based Jamestown Foun­da­tion. China faces more do­mes­tic tur­bu­lence as Xi’s crack­down, while pop­u­lar, threat­ens the ca­reers, the for­tunes and even the lives of many of the coun­try’s rich and pow­er­ful, who will in­ten­sify their plot to bring him down.

Xi’s ap­petite for power has seen him reach out to the es­ti­mated 60 mil­lion peo­ple of Chi­nese back­ground liv­ing out­side China. In Canada, in­flu­en­tial com­men­ta­tors have fret­ted that some among the coun­try’s 1.5 mil­lion eth­nic Chi­nese, along with the 186,000 stu­dents from China, could be op­er­a­tives for Beijing. If such sus­pi­cion grows, the spot­light could shift to the eth­nic Chi­nese com­mu­nity, who make up 20 per­cent of Metro Van­cou­ver’s pop­u­la­tion.

In a Cana­dian Press in­ter­view last year, David Mul­roney, Cana­dian am­bas­sador to China from 2009-12, warned of Beijing’s at­tempts to tap mem­bers of the Chi­nese di­as­pora in a bid to in­flu­ence Canada’s po­lit­i­cal process. This spring, Charles Bur­ton, a well-known China hawk, penned an Ot­tawa Cit­i­zen col­umn that ad­vo­cated ex­pand­ing re­sources for “our po­lice and se­cu­rity agen­cies to counter Chi­nese sub­ver­sion.” The as­sis­tant pro­fes­sor of po­lit­i­cal sci­ence at On­tario’s Brock Univer­sity wrote of flush­ing out “politi­cians with di­vided loy­al­ties” and “apol­o­gist pun­dits” who he be­lieves are act­ing for China’s in­ter­ests in Canada.

Bur­ton’s commentary draws a re­buke from the CUIA’S Houlden, who thinks Cana­di­ans would be bet­ter served by in­formed di­a­logue and de­bate on China is­sues, not gen­eral rhetor­i­cal at­tacks on peo­ple with­out names and de­tails. “My con­cern is that [Bur­ton’s com­ment] could be seen as an at­tack on for­mer and cur­rent civil ser­vants,” he says. “Both have dif­fi­culty de­fend­ing them­selves against in­nu­en­does.”

Also, peo­ple of Chi­nese an­ces­try are a large and di­verse group. “Cana­di­ans of Chi­nese ori­gin have very dif­fer­ent po­lit­i­cal views,” Houlden says. “They’re not mono­lithic at all.”

To en­gage an in­creas­ingly com­plex China, Canada needs to draw on the knowl­edge and skills of the tiny pool of Chi­nese tal­ents at its dis­posal. But Chi­nese Cana­di­ans on the front line now face the ad­di­tional hur­dle of prov­ing they’re not fifth colum­nists.

“They could go anti-china to prove that they are even more anti- China than the non-chi­nese,” Se­na­tor Woo sug­gests with a tinge of sar­casm. “That would be the easy way out.”

Woo says this is al­ready hap­pen­ing in Van­cou­ver, where some of the more xeno­pho­bic voices hit­ting out at Chi­nese and other for­eign buy­ing of real es­tate be­long to Chi­nese Cana­di­ans.

Chak Au, a mem­ber of Rich­mond city coun­cil since 2011, de­cries the in­creas­ing dif­fi­culty for of­fi­cials of Chi­nese eth­nic­ity to op­er­ate if ques­tions about their loy­alty grow. “If such sus­pi­cion be­comes para­noiac, what good will it have for the coun­try?” asks the for­mer men­tal health worker, who em­i­grated from Hong Kong in 1988 and served as a school trustee for 12 years.

By ob­sess­ing over how China might harm Canada, the hawks for­get that the di­as­pora threat works both ways. UBC’S Paul Evans turns the ques­tion around. “To those who fear the Chi­nese trying to in­fil­trate and in­flu­ence Canada, I ask if we’re not in­flu­enc­ing them,” he says. “As long as they are here, we are ex­pos­ing them to po­lit­i­cal rea­son­ing, val­ues and ex­pec­ta­tions of how gov­ern­ment and our so­ci­ety is run. So, who is in­flu­enc­ing whom?”

Chi­nese Pres­i­dent Xi Jin­ping has been slowly con­sol­i­dat­ing power while rid­ding his coun­try of “cor­rup­tion” POWER PLAY

BANGBANG Wu Xiao­hui, for­mer chair andCEO of An­bang In­surance Group; the Ben­tall Cen­tre tow­ers in Van­cou­ver, pur­chased by An­bang and now re­port­edly owned by the Chi­nese gov­ern­ment

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