CANADA’S CHINA HAND.

The appointment last week of global consultancy guru Dominic Barton as Canada’s ambassador to the People’s Republic of China generated unusual critical reaction. Even the liberalish Toronto Star weighed in with an editorial which asked the headline question: “Is Dominic Barton the right man for Canada in China?”

From one perspective, Barton could be the ideal choice. As a certified Sinophile and an old China hand who has dipped many fingers into the Communist Party’s statist economic pie, Barton could probably pick up his Huawei smartphone today and get a call straight through to Premier Xi Jinping. Hey, Jinny. It’s me. Dommy. How’s it going?

Such access, built up over his years as the Shanghai-based head of McKinsey & Company’s Asian operation, and later as McKinsey’s global managing director, could allow Barton to help the Trudeau government as it grapples with imprisoned Canadians, human rights issues, a canola trade crisis and the escalating burden of being a mouse caught in the middle between sparring American and Chinese elephants.

If Barton can open doors and capitalize on his years of China-boosting activities and top-level schmoozing with Communist leaders and state corporate executives, then Canada could benefit.

The trouble with Barton, however, is that his presumed ease of access is based on his long cosy relationship with China as the world’s leading practitioner of state corporatism. Barton thinks the Communist Party of China has developed some fantastic economic models that might even be exportable to the rest of the world, including Canada.

Barton and McKinsey, for example, have been enthusiastic backers of China’s Belt and Road Initiative (BRI), a massive global infrastructure scheme that aims to connect China to markets in Europe, Asia and Africa through construction of ports, rail lines, and other projects. It would connect China to more than 65 countries, from Greece to Malaysia and Russia, from Italy to Sri Lanka and Kenya. Also known as the One Belt, One Road (OBOR) infrastructure initiative, the project was described by Barton in 2015 as “inspiring” and a model for “long-term thinking” with infrastructure spending as the foundation for economic growth.

China’s Belt/Road model, suggests Barton, is the way of the future. “The Chinese saying ‘build a road first if you want to get rich’ is spot on — data suggests that for every $1 billion in infrastructure investment, 30,000 to 80,000 jobs are created, generating $2.5 billion in new GDP.” With massive infusions of capital from China’s state-run corporations, and government-established financial institutions, China would lead the world to new prosperity. Similar claims were made a year later by other McKinsey partners.

In a report last December — How McKinsey Has Helped Raise the Stature of Authoritarian Governments — The New York Times singled out Barton for his support of the Belt/Road initiative, noting his role on the advisory board of the China Development Bank. Also, ”nine of the 20 top Belt-and-Road contractors are or have been McKinsey clients,” including China Communications, which won a $13-billion contract to build a Malaysian railroad.

The implementation of the Belt/Road initiative has so far failed to live up to its role as a model for national or global economic development. Wendy Dobson, co-director of the Rotman Institute for International Business in Toronto, reports in a new book on China that the Belt/Road project has more than its share of financial and developmental problems.

In Living with China: A Middle Power Finds Its Way, Dobson provides a highly readable, concise and incisive review of the latest developments in the saga of China’s emergence as a new global power. Dobson reviews the buildup of Belt/Road difficulties, including a report that 32 per cent of $1.3 trillion in spending so far, or about $420 billion, has “encountered performance delays, public opposition, or national security concerns.” Another problem is that China’s lending practices, via its own development institutions, have created “debt distress” in receiving countries, thereby seriously undermining the growth potential provided by heavily-financed projects.

Dobson also objectively summarizes the muddles — or worse — created by China’s state intervention in trade, innovation, planning, investment, banking and via stateowned enterprises (SOEs). One example: as China fiddled with its state-managed lending regime, lending to private sector non-financial corporations fell from 57 per cent of total lending in 2013 to 19 per cent in 2015. The share of lending going to state-owned firms jumped from 35 per cent to 69 per cent during the same period.

The question is whether Barton can bring a clear and objective mind to his interactions with China as Canada’s ambassador. His admiration and support of China’s statist economic ideas, and his frequently stated disdain for market capitalism, certainly give one reason to pause.

Barton also headed the Trudeau government’s Advisory Council on Economic Growth, which issued reports that essentially reflected the Chinese idea that infrastructure building drives growth and prosperity. It recommended establishing a Canadian Infrastructure Development Bank, which now exists as the source of a stream of Liberal pork-barrel pre-election announcements.

China offers nothing to Canada in terms of policy or ideological instruction. In her generally positive book, Dobson also warns of several realities.

“First, they are not like us. China punishes countries, particularly smaller ones.” Dobson could have added that China also punishes its own people, and its own market entrepreneurs, not to mention developments in Hong Kong.

If Barton as ambassador can stick to promoting true Canadian individual and market values to the Communist rulers of China, instead of preaching Chinese values to Canadians, then he just might turn out might to be the right man for Canada in China.