Op-Ed Contributors

Chinada and Chinadarica

By Victor Zhikai Gao (chinadaily.com.cn)
Updated: 2009-12-07 15:38

The official visit to China by the Canadian Prime Minister Harper is taking place at an extraordinary historic moment. For the first time ever since the Industrial Revolution, all the three largest economies in the world are now in the Pacific Region, two of them are in Northeast Asia. All signs seem to indicate that China will surpass Japan, either this year or no later than 2010, as the second largest economy in the world.

The economic disparity between China and the United States is at its narrowest ever since the founding of New China in 1949, and the gap is closing rapidly. For the first time in memory, China, as a developing country with relatively low per capita income, has become the largest creditor nation to the United States, the only remaining superpower in the world.

Therefore, barring major natural or man-made disasters, China may surpass the United States as the largest economy in the world in a matter of a couple of decades, i.e. during the lifetime of most of us in the world today. In its most recent report, Goldman Sachs has pinpointed 2027 as the year of the shift.

The gravitational pull of the United States on Canada is most natural and powerful, and will remain so for decades or even centuries to come. At present, 78 percent of its export and 53 percent of its import are with the United States. But this is no reason for Canada to put all its eggs in one basket. When President Obama is calling himself the first Pacific President of the United States, when Americans are playing with the G2 concept, it is in Canada’s own fundamental national interest to diversify its trade relations and become as much a North American economy as a Pacific economy.

At present, Canada’s export to China is barely only one third of Australia’s export to China. For a country like Canada to run a huge trade deficit with China is simply ludicrous. Therefore, while the current visit to China by the Canadian Prime Minister is being warmly welcomed, the fact that Mr. Harper is the only head of government of any OECD country who has not visited China for almost four years in his office does explain the lack-luster performance of our bilateral relations.

When the bilateral political relations are not given their proper importance, the fundamental interests of the two peoples are being victimized. This is particularly sad considering the fact that Canada actually has all the reasons to have the best relations with China among all the OECD countries. After all, Dr. Norman Berthune, who gave his life for China’s just cause in the war of resistance against Japanese aggression, is a household name in China and has generated the rock-solid foundation for China and Canada to build their bilateral relations upon.

Chinada and Chinadarica

Given their very different background and national circumstances, China and Canada will always have differences, but they should have enough vision and courage to refuse to let these differences hijack the bilateral relations.

If one’s judgment is not distorted by bias or misperception, it is natural to conclude that China can easily become Canada’s second largest trade partner and one of the most important investors in Canada, and Canada’s export to China may double, triple or even quadruple in the years to come, thus helping create hundreds of thousands of jobs in Canada.

The growth of China-Canada relations will not only generate new growth in Canada, but also will make the overall Canadian economic growth more balanced and more resilient.

China and Canada have no reasons to dismiss or marginalize each other, and have all the reasons to envision the prospect of a Chinada, with China becoming Canada’s second most important trade partner and investor, next only to the United States.

Furthermore, Chinada does not need to grow their relations at the expense of the United States. On the contrary, Canada can play a very important mediating or facilitating role between China and the United States. Canada may have all the reasons to request an observer’s seat at the biannual Strategic and Economic Dialogue between China and the United States.

In terms of friendly relations, Canada has all the reasons to be more friendly to China than the United States. In terms of animosities, if any, Canada has no reason to have more animosities against China than the United States. Rather than becoming an extreme outlier in terms of relations with China, Canada can not only benefit itself but all the other stakeholders by becoming a bridge and special channel of communications between China on the one hand, and the United States and other OECD countries on the other hand.

As far as the G2 concept is concerned, Chinese Premier Wen Jiabao officially spurned the idea during his recent meeting with President Obama in Beijing, calling the concept too exclusive.

China may well prefer the GW concept, i.e. the Group of the World, in order to be as inclusive as possible. After all, China is rarely tired of seeking as many friends as possible in the world.

The United States and China will be the two largest economies in the world for many years and decades to come. Canada has all the reasons to position itself in between China and the United States and benefit from being a bridge rather than a barrier between the two largest economies in the world.

As a matter of fact, a better Chinada will help bring about a better Chinadarica, i.e. better relations among China, Canada and America. This will be a win-win-win situation for all these three countries.

The author is a director of China National Association of International Studies, a director of the Center for China and Globalization, and an executive director of Beijing Private Equity Association and chairman of the International Committee of BPEA.