October, 2001
DPRK…the Canada China Airservices Agreement…and preparing for the visit of the DM of Agriculture and Agrifood Canada…
Monday, October 01 – Tuesday, October 02
Chinese National holidays.
Wednesday, October 03
Letter from me, as Canada’s Senior Official for APEC, to APEC Senior Officials Chair and Vice-Minister, MFA, Wang Guangya, recommending changes to the language of the Shanghai Accord and the Leaders’ Declaration.
DPRK
First meeting with Eric Weingartner re DPRK. In the ‘90s, Eric was the first Canadian and the first foreign NGO representative to live, with his family, in Pyongyang. Truly one of the most remarkable Canadians I have met. His persuasive skills vis-à-vis the DPRK leadership, no less, with credibility going back to the late 1970s, visits from 1985 onward, led to residency in Pyongyang from 1997 to 1999, as coordinator of the UN’s Food Aid Liaison Unit in response to ‘the Great Famine’, which managed foreign food aid contributions – including from Canada.
Thursday, October 04
APEC
Letter from PM Chrétien to President Jiang Zemin, responding to his proposal to address the issue of international terrorism during the Leaders’ Shanghai meeting.
DPRK
Courtesy call on Ambassador Choe, at his Embassy. I don’t have notes but I expect that, following the ‘politesse’, we discussed my forthcoming visit to North Korea for the presentation of credentials.
The DPRK mission was no doubt the most open-to-the-outside and lugubrious-on-the-inside embassy in Beijing: ‘open’, in the sense that there were no permanent Chinese police or security guards outside or surrounding the Embassy because…who is going to ‘escape’ China via the DPRK (!), and lugubrious inside because there was little lighting, few people despite the significant size of the building and a haunting atmosphere – one of my staff compared it to the house of the Adams Family. It was said in Beijing that some staff members worked for wages in what was the only North Korean restaurant in town.
There would be little point in having notes of the dinner conversation: other than discussing my North Korea visit schedule, the Ambassador and staff, however cordial and pleasant at the human level, would provide no information or insight about what was truly happening in NK, whether on the economic situation, domestic politics or international relations. That was not their job. Conveying the Party Line, on the other hand, was how they survived in the system.
Meeting with Dr. James Boutillier, Special Advisor to the Commander, Pacific West Coast Fleet.
Arts&Culture
Attended an evening performance of Canadian pianist Martin Mayer
Friday, October 05
Message thanking the staff of the Chongqing and Guangzhou Consular staffs for their warm welcome and helpful comments during my recent visits to their offices, and appreciation for their efforts.
Call on German Ambassador…and across the street neighbour…Joachim Broudré-Grogor.
Monday, October 08
Admin
List of DFAIT Mandarin language speakers, professional and intermediate.
An impressive list of 20 ‘confirmed professionally capable Mandarin language speakers’ in the Department. It is not clear how these numbers increased – or possibly decreased – over subsequent years. My personal regret is that I did not achieve much more than ‘street Chinese’ during my years in the PRC. On ne peut pas tout faire…
ChinaPs&Ms
Letter to People’s Government of Guangdong Province Vice Governor Li Honzhong following up on my visit the previous week.
My letter briefly flags the governance challenges that are coming with China’s accession to the WTO, and the special role that Guangdong is expected to play, given its history, its geography and the level of economic development it has attained.
Letter to Shenzhen Municipal Government Mayor Yu Youjun, thanking him for hosting the visit to his city the week before.
Letter to Guangzhou Municipal Government Mayor Lun Shusen thanking him for the opportunity to meet. Canadian environmental experts helped implement Guangzhou’s ‘Clear Water-Blue Sky’ action plan, strongly supported by Mayor Lin.
APEC
Foreign Minister Tang Jiaxuan letter and materials covering the agenda for the APEC Ministerial meeting, including letters addressed to DFAIT Minister John Manley and International Trade Minister Pierre Pettigrew.
Education
Exchange with Michael Kelly, Dean, Faculty of Administration, University of Ottawa, describing the China Cohort MBA Program in Ottawa, and the plans to establish an Executive MBA program in Beijing. My response outlines the extremely competitive market in China for foreign MBA program offers, and the risks entailed.
APEC
Accompanied by Australian Ambassador Irvine, meeting with Senior Officials Chair Wang Guangya on APEC draft statements.
Letters to Chinese media organizations re Canada’s role in APEC.
DPRK
Meeting with Col. Ri Chan Bok.
I so regret not having notes of this meeting, not that much truth or substance could be expected from the North Koreans, as noted above. Still, the willingness to dialogue by both sides is preferable to silence. And with time, can lead to (somewhat and only occasionally) truthful responses from our DPRK counterparts.
Meeting with Ambassador Shankar Menon.
One of the most distinguished Ambassadors in Beijing, fluent in Chinese. Subsequently became Foreign Secretary and later foreign policy advisor to PM Manmohan Singh, coincidently when I served as High Commissioner to India 2008-2010. He was a close friend and colleague in China and – a pleasant surprise for both of us – in India.
Tuesday, October 09
90th anniversary of the 1911 revolution, celebrated at the Great Hall of the People.
Échange avec Sénateur Marie Poulin, lui remerciant pour son message de félicitation à l’égard de ma nomination comme ambassadeur.
Échange avec le Chef de l’Opposition de l’Assemblée nationale, Jean Charet, au sujet de ma nomination comme Ambassadeur.
Wednesday, October 10
CCBC
Welcome reception hosted by the Canada China Business Council.
Thursday, October 11
APEC
Letter to APEC Senior Official Chair Wang Guangya on arrangements regarding the roles of PM Chrétien and Trade Minister Pierre Pettigrew during the forthcoming meetings in Shanghai.
Separate letter to SOM Chair Wang commenting on the draft Leaders’ Declaration.
Meetings:
ChinaMFA
MFA Vice Minister Li Zhaoxing, preparatory to the PM Chrétien’s bilateral visit in tandem with the APEC Leaders’ Meeting.
ChinaMins&VMs
COSTIND/Commission for Science, Technology and Industry for National Defence Chairman Liu Jibin.
Courtesy call on Turkish Ambassador Rafet Akgunay.
My dear Wife Kumru being Turkish, and her diplomat father having served as Turkish Ambassador both to the Republic of China and to Japan in the late ‘60s, Rafet and Mrs. Akgunay’s welcome was especially warm.
ChinaGov
Dinner hosted by Vice-Minister Ge Zhirong, ACSIQ, the General Administration of Quality Supervision, Inspection and Quarantine.
Given the growing importance and size of Canada’s agricultural and forestry exports to China, ACSIQ was one of the most important – and sensitive – government institution for Canada. My staff and I had very close ties with the organization, as will be seen.
Friday, October 12
BT&I
Letters to MoFTEC Vice Minister Sun Zhenyu and Ministry of Information Industry Minister Wu Juchuan requesting meetings in October with the JDS Uniphase CEO regarding expansion of the company’s investments in China. A parallel request for such meetings was also channeled from Jack Austin to Ambassador Mei Ping in Ottawa.
Meetings:
- CIDA President Len Good.
BT&I
- Nortel’s leadership group in China.
Sunday, October 14
Sunday visit to the Great Wall at Badaling, accompanying Senator Dan Hays and the Senate delegation.
Monday, October 15
CdaPs&Ms
Exchange with BC Premier Gordon Campbell regarding his forthcoming trip to China, to emphasize BC’s future ambitions and specifically to promote and support the Council of Forest Industries. I accept his invitation to attend a program launch in Shanghai during his visit.
Meetings:
ChinaGov
Civil Aviation Administration of China Minister Liu Jianfeng.
My colleague Pierre Pyun in the Commercial Section of the Embassy held the civil aviation file, one of the most dynamic given the rapid advances in China’s determination to become not only a major market for aviation products and services – from airplanes to software – but also major producer to meet its domestic needs and enter the highly competitive international markets. Pierre’s article should be read not only for the story of Canada’s interests and engagement in the Chinese market, but for his approach to becoming an effective Trade Commissioner, and indeed in the broader sense, successful Foreign Service Officer.
CANADA CHINA AIRSERVICES AGREEMENT
Pierre Pyun
Pierre Seïn Pyun is Vice President, Government and Industry Affairs at Bombardier in October 2011. A lawyer by training, Mr. Pyun served with the Canadian federal government from 1998 to 2011, including at the Canadian Embassy in Beijing and the Canadian Consulate General in Hong Kong in trade and economic positions between 2001 and 2009.
Mr. Pyun sits on the board of directors of several organizations, including the J. Armand Bombardier Foundation, the Montreal Council on Foreign Relations and the Aerospace Industries Association of Canada (as the Chair). Mr. Pyun is also a lecturer at the Max Bell School of Public Policy of McGill University.
INTRODUCTION
The turn of the millennium was characterized by great optimism around China’s emergence as a major market and an economic powerhouse.
The lure of its market was irresistible for many multinationals. The sheer potential China offered to become a market of a continental magnitude was certainly a driver for rising business interest in China in several different sectors. The scale was indeed unprecedented. Hundreds of millions were joining the middle class and economic reform was in full swing. China’s accession to the World Trade Organization in 2001, promising greater market access and more predictability through a global rules-based framework, added to the enthusiasm.
Against this backdrop, aviation, as an enabler but also a reflection of economic growth, was expanding at a breakneck pace, often beating projections. Players in the air services domain but also in the aviation equipment field were all vying to tap into the tremendous growth potential of China. Large Canadian players, like Air Canada, Bombardier, CAE, Bell Helicopter Textron Canada and Pratt & Whitney Canada were no exception. A growing number of small and medium sized enterprises were also looking at jumping onto the China bandwagon.
For the Canadian Embassy and Consulates, supporting their expansion and that of their supply chains in China was a priority. As aviation is in many regards a managed industry in China, in which government interventions are prevalent, particularly those emanating from the central government, the trade program’s role in advocating for Canadian interests was especially impactful and sought after by Canadian businesses.
In fact, aviation was considered and is still considered a sector of strategic and national interest for China. The presence, policy and actions of the government in aviation at every turn were ubiquitous and unavoidable.
LANGUAGE TRAINING
This was the context in which I arrived in Beijing in 2001 to serve as a Trade Commissioner at the Canadian Embassy looking after, inter alia, transportation sectors including aviation. I was just coming out of a two-year intensive language program at the Canadian Foreign Language Institute of the then called Department of Foreign Affairs and International Trade (DFAIT). I had started learning Mandarin from scratch in 1999 to reach, in theory at least, professional Mandarin proficiency by the time I had graduated. This meant that, in principle, I was supposed to be able to use Mandarin to work on a daily basis, and carry out my diplomatic and Trade Commissioner duties in one of the most difficult languages to master.
I am saying “in theory”, as the location of my intensive language studies was Gatineau, on the other side of the Ottawa river from the headquarters of DFAIT, the Pearson building, in a former high school that we simply called “Bisson”. Although the language program did bring me to Shanghai, where I had temporary assignments, and also in Harbin, where I did a stint at Harbin Gongye Daxue (Harbin Institute of Technology) for an in-county Mandarin language immersion, the bulk of my training took place in Gatineau with native Mandarin speakers, as instructors, but in an otherwise francophone and anglophone environment.
Initially, it was more a desire for discovery and adventure that led me to study Mandarin, rather than a passion for China or its culture. However, over time, I did become deeply invested in the language and passionate about Chinese culture, history and geopolitical developments. In fact, I became fascinated by all aspects of China, devouring books, including virtually all the books that authors like British-American historian Jonathan Spence and Chinese-Canadian journalist Jan Wong had written about the country, for instance The Search for Modern China, looking at China’s economic and political development through the lens of its history, or Red China Blues, for a glimpse into the Cultural Revolution.
I plunged with all my energy and heart into studying Mandarin. I memorized characters with flash cards I made myself with great care and dedication, convinced that writing myself the characters, even if only once, would help me focus and remember.
Above all, I had persuaded myself that being able to speak Mandarin, albeit I realized that the more I learned Mandarin, the more the extent of my ignorance about the language became clearer, was key to a successful posting to China. As Albert Einstein once famously said: “The more I learn, the more I realize I don’t know.”. It is with this sobering thought that I plowed ahead, with the objective, probably ever unattainable, to gain excellent fluency in Mandarin, as close as possible to that of a native speaker. I kept top of mind, the following Chinese expressions to guide my efforts:
“kenchiku”, “yugongyishan” de “jingshen”
肯吃苦, 愚公移山的精神
A willingness to “eat bitterness” and a mindset of “moving mountains”. Mandarin is indeed a lifelong endeavor. To this day, I take maintenance lessons, focusing on reading, as even Mandarin native speakers will forget Chinese characters over time if they stop reading.
Furthermore, I was told on numerous occasions the importance of “guanxi” (关系), or relationships, for success in China, either in business or in any other fields. In my mind, this is a cliché or an axiom, as relationships are key in any societies, although their effectiveness and usefulness would manifest themselves differently depending on cultural realities and the prevailing societal norms.
Admittedly, in some places, the usefulness could be more prominent, especially in the absence of clear rules, or even rule of law, from a systemic framework point of the view. There is no question, when you do advocacy in any culture or jurisdiction, relationships are paramount, and China is no exception. This means investing in relationships for the longer term and avoid seeing these relationships as purely transactional and as a function of immediate requirements or objectives. This means that when contacts approach you for assistance or input, you always try to be in a solution mode, understand what they are seeking and strive to be helpful, even when our influence on a matter can be limited. It also means sustaining engagement with contacts and nurturing relationships, even or especially when there is no ask.
I was persuaded that being able to speak Mandarin would allow me to do my work much more efficiently and establish relationships at a depth and breath levels that would give me, and Canadian interests by extension, an edge. For the better part of eight years in my careers in the foreign service, my main work focus, on a full-time basis, was to learn Mandarin. It was arguably the only time in my professional life that I did not have to manage a large number of competing priorities. I was able to apply business professor and author Martin Hansen’s time management diktat “do less, then obsess”.
This would be my first advice for competitive, effective and impactful diplomacy: the criticality of language, if you can invest the time, even in this day and age, where English is considered the lingua franca of business and diplomacy. I thoroughly subscribed to Nelson Mandela’s statement: “If you speak to a man in a language he understands, you speak to his head. If you speak to him in his language, you speak to his heart.” During my four years working for the Canadian government in China, I was able to experience first-hand on how communicating with local contacts in Mandarin would enable more candid and detailed discussions, during which guards would come done and contacts, whether they be government, business or academia, would set aside their talking points in English and engage in more meaningful and insightful exchanges.
I believe effectiveness and productivity were considerably enhanced when you were able to connect via phone on a regular basis, outside of the setting of formal meetings, to validate points, pass on messages, garner information and gain color on any situation.
SECTOR EXPERTISE: ADVICE TO ASPIRING DIPLOMATS
Generally speaking, the norm among Foreign Service Officers is towards becoming a generalist, seen as essential to be promoted into managerial roles. Developing two or three threads for your career around a topic, sector or regional specializations are and remain critical and advisable for your own professional development but also to better serve the interests of Canada.
As a result, the foreign service system is geared toward diversification of experience, with short three, four year posting cycles and the “to-and-fro” and balance expected between Ottawa and overseas assignments. The nature of the job necessitates becoming well versed in a wide range of topics and sectors, mirroring the breadth and diversity of Canadian interests.
That said, there is also plenty of room for specialization. From the outset of my posting to the Commercial Section of the Embassy, I became an avid follower of China’s aviation sector both from an industrial and air services viewpoints. Along with learning Mandarin, aviation and transportation industries became enduring passions for me that I would carry forward throughout my professional life in the public and private sectors.
In this context, my advice for any diplomat – be it generalists or specialists – is to know your topics extremely well, and for diplomats responsible for economic matters or Trade Commissioners to acquire a deep understanding of the industries you are responsible for, and not only of the industry market dynamics in the country you serve, but actually of the overall industry workings, challenges and opportunities in Canada and internationally. Who are the key players? What is the competitive landscape? What are Canadian strengths and weaknesses? How is the industry regulated? What are the key challenges, opportunities, threats and risks for the industry, going forward?
I immersed myself in transportation industries, attempting to gain insights through meetings with industry actors, Canadian, Chinese and international, reading about the sectors, and participation in industry conferences and fairs. I focused on all the transportation modes: air, ground (logistics, rail, autos) and maritime (shipping, ports) transportation.
Sector expertise I gained over time enabled me to firmly grasp Canadian capabilities, and better match these with needs on the Chinese side. This is the sweet spot that any diplomat on the trade side should aim for. The prerequisite is not only an in-depth comprehension of Canadian strengths, including at company level to identify who has the wherewithal to follow through and potential to win, but also a solid handle on the market needs of the country you are posted to, in particular the competitive environment, the market entry strategies, potential local partners, and risks-rewards, costs-benefits equations.
AVIATION GROWTH
When I arrived in China to serve at the Canadian Embassy in Beijing, air traffic growth projections were that China would reach the 100 million passenger mark in 2005. In 2004, China had already reached 121 million passengers, a staggering 38% increase from 2003, although in 2003, air transportation was considerably impacted by the spread of the severe acute respiratory syndrome (SARS) disease in China. Air cargo traffic had also been expanding swiftly, with annual growth rate in the vicinity of 20%. Passenger traffic was expected to keep on increasing at a 10% rate in the ensuing years.
There were significant changes underway in the Chinese aviation industry, fueled by economic growth and the expansion of the middle class, shaping policy and industrial strategy decision-making in China. In 2002, the Civil Aviation Administration of China (CAAC) announced the consolidation of nine airlines around three major groups: Air China, China Eastern Airlines and China Southern Airlines, headquartered in China’s economic and political centers, namely Beijing, Shanghai and Guangzhou.
“Non-CAAC carriers” were consolidating and expanding as well, around for instance Hainan Airlines, Shanghai Airlines and Xiamen Airlines. These were private or local government invested airlines. Chinese airlines, from a relatively low base, were adding aircraft at a mouthwatering pace for foreign aircraft makers. Chinese airlines had 750 aircraft in 2005. In one year alone in 2004, they added over 100 aircraft. 2004 and 2005 saw a flurry of aircraft orders from Boeing and Airbus, short haul, single aisle aircraft orders but increasingly longer range aircraft commitments as well, like for B747s, B777s and A330s. Projections were eye-popping, by any measure: China would need an additional 1600 aircraft by 2020; China would triple its fleet size by 2023; and China would be the second largest market for commercial aircraft by 2020.
In the regional aircraft space, where Canada was a contender with Bombardier’s regional jets, growth projections were also impressive. Bombardier and its archrival then in the regional aircraft sector, Embraer, were very much paying attention to China. But, China was a very tough nut to crack.
INDUSTRIAL POLICY
China acceded to the WTO in 2001. Although China did not sign the WTO Agreement on Trade in Civil Aircraft, China in the accession documents (Working Party Report) made the following representation: “The representative of China confirmed that China would not impose any provisions of offsets or other forms of industrial compensation when purchasing civil aircraft, including specified types or volumes of business opportunities. The Working Party took note of this commitment.”
In reality, notwithstanding this undertaking, foreign aircraft manufacturers knew very well that without engaging in some form of industrial collaboration and supporting China’s aerospace manufacturing capabilities, selling aircraft in China would be an extremely challenging proposition. Chinese airlines needed the approval of the National Development and Reform Commission (NDRC), considered a powerful, super ministry – whose Chair had senior ministerial status. Vice chairs – they had several – also had ministerial ranking. Their collective role regarding the importation of foreign aircraft was very significant, irrespective of whether the commercial deal was for one aircraft or 100. The development of the aerospace manufacturing industry was also a key priority for China, and the NDRC was also in charge of delivering on this priority for the Chinese government. Chinese airlines would not even bother speaking with a foreign aircraft manufacturer not involved in industrial offsets or without any offset plans, given the central government’s assertiveness in the sector and levers and influence that it wielded.
In Decembre 2002, Brazil’s Embraer signed an agreement to build a production line in China through a joint venture with Harbin Aircraft Industry Group and Hefei Aviation Industry Company, companies then controlled by state-owned aerospace conglomerate, China Aviation Industry Corporation II or AVIC II. Embraer would assemble its ERJ 135/140/145 family aircraft to meet the needs of the Chinese market for regional aviation. This was seen then as a major move meant to get ahead of Bombardier and any other competitors in the regional aviation segment in China. The hope for Embraer was that this investment would pave the way for significant orders for ERJ aircraft by Chinese airlines.
Bombardier also had plans to undertake manufacturing activities for its commercial aircraft in China. The company had been successful selling regional jets to airlines like Shandong Airlines and Yunnan Airlines. There was potential for more aircraft sales, but there were no doubt challenges also, including as noted above the need for Chinese airlines to obtain NDRC approvals. There was also the Value Added Tax (VAT) of 17%, applicable on regional aircraft. The 17% VAT, the standard rate then, had not been reduced for aircraft below 25 tons, the category that most regional aircraft fell into, whereas a lower VAT rate applied to larger aircraft. Some industry observers argued then that the VAT rate for regional jets remained higher to protect the domestic market for the ARJ21, China’s own regional aircraft program and a top priority for the Chinese government.
China had indeed attempted, in many different ways and over several decades, to develop its aerospace industry, starting from building Russian aircraft models under licenses, and then creating its own versions (Y-8 aircraft, Y-12 aircraft, etc.) often powered by foreign engines, such as Pratt & Whitney Canada’s powerplants, advancing as well to the “Trunkliner” arrangements in the 90s with McDonnell Douglas, under which MD-80 and MD-90 aircraft were built in China with Douglas parts and several other initiatives. There have also been forays with Airbus into aircraft manufacturing in China. Airbus had announced a new European aerospace joint venture to partner with China in the development of a proposed AE-100 regional jet. A more recent example is Airbus’ assembly line for the A320 in Tianjin through a joint venture with Aviation Industries of China or AVIC which is ongoing.
A watershed moment in China’s industrial policy for aerospace, and a demonstration of its resolutely “dirigiste” approach to boost aerospace capabilities, was the creation in 2008 of Commercial Aircraft Corporation of China (COMAC) by reorganizing China’s immense aerospace industrial assets and apparatus under COMAC and AVIC, and mandating COMAC to lead programs such as the C919 and C929, with design and systems integration to be carried out in China, but key systems such as engines and avionics to be imported from foreign leading firms.
There is an instructive book written about China’s long journey to build a world class aerospace sector and commercial aircraft: China Airborne by James Fallows. The book recounts in details China’s endeavor to claim aeronautical dominance, which received a further boost in 2011 in China’s twelfth Five-Year Plan. The plan included a commitment to spend a quarter of a trillion dollars to turbocharge China’s aerospace industry.
To be fair and to provide context, several nations then as now work to develop essential design and system integration competencies, and consider aerospace as a strategic sector of national interest. As a matter of fact, Canada continues to be one of the only countries that has the ability to develop, manufacture, deliver and service aircraft to the highest safety and performance standards. These design, system integration and engineering skillsets continue to be sought after by many nations, e.g. Japan, South Korea, Turkey… and China.
All this reflect the complexity of the industry. Illustrative of this ongoing reality is an example from recent years: in 2023, Mitsubishi Heavy Industries (MHI) announced that it had abandoned its SpaceJet regional aircraft project after years of delays. The company admitted it had “insufficient initial understanding of the highly complex type certification process for commercial aircraft”. This is quite telling coming from a firm like MHI and a nation as technologically advanced as Japan. The complexities of aerospace, and the safety and certification requirements, make it a sector with barriers to entry that are amongst the most difficult to overcome.
China made building aircraft one of its priority science and technology areas, seeking self-reliance, a cornerstone of its economic policy. Then as now, there has been a long-standing belief within the Chinese government that any economic powerhouse should have its own aircraft manufacturer. To this day, China is investing heavily in their wide body C919 and C929 aircraft programs.
This is the context in which Canadian aerospace companies were pursuing opportunities in China. The Canadian government, with the support of the Canadian Embassy, raised at every opportunity the VAT matter with the Chinese government, as an impediment for greater market access for aircraft manufacturers such as Bombardier. During my first posting, the matter was raised by several ministers and Canada’s Ambassador Joseph Caron and the Canadian Embassy’s economic team led by Michael Martin, and that on numerous occasions, including at the annual Joint Economic and Trade Commission (JETC) meeting. China never budged on the matter and asserted that there was no discriminatory practice behind its VAT policy, as it applies to all regional aircraft regardless of its origin.
TOURISM
In keeping with air traffic growth, ambitious airport expansion plans were also afoot in China. The country had 135 airports in 2005 and planned that number to reach 240 airports by 2020. All these projections have largely panned out.
In 2003, China enacted new measures to transfer the ownership, management and operation of airports from the central government’s Civil Aviation Administration of China (CAAC) to local governments, exceptions being Beijing Capital Airport and those located in Tibet. China was actively seeking investments in Chinese airports and international management expertise, to fill in perceived gaps in management and operation experience at Chinese airports. Over several years, the Airport Authority of Hong Kong (AAHK) invested in several Chinese airports. We also saw investments into Chinese airports from other players. Aéroports de Paris invested into Beijing Capital Airport and Copenhagen Airports into Hainan Meilan International Airport.
Already at the turn of the century, Chinese tourism traffic was in an upswing, domestically but also internationally. Several countries had received “Approved Destination Status” (ADS), meaning a designation granted by the Chinese central government, through its proxy the China National Tourism Administration (CNTA), allowing Chinese tour groups to travel to designated countries. ADS had been coveted by Canada for several years and had been a frequent topic of conversations at the highest levels in bilateral meetings between Canada and China. Not unlike the VAT matter noted above, it was part of a list of market access issues the Canadian Embassy was consistently raising in our interactions with the Chinese government and striving to identify avenues for resolution.
Chinese outbound tourism was estimated to number 16 million tourists in 2003. The World Tourism Organization anticipated that China would be the fourth country with the largest number of outbound tourists and the biggest tourist destination by 2020, reaching 100 million tourists by then. No wonder Canadian tourism industry players were paying more and more attention to China and were advocating for ADS, pressing the Canadian government to deliver progress on this. The Canadian Tourism Commission was a voice in China for the Canadian industry and a close partner of the Canadian Embassy to promote Chinese tourism in Canada and lobby the Chinese government and CNTA for ADS.
However, this proved to be a daunting task if not a fool’s errand as the matter transcended CNTA and our usual interlocutors at China’s Ministry of Commerce and Ministry of Foreign Affairs. The Chinese government had linked the ADS matter to security considerations, notably China’s long-standing grievance about Canadian immigration and refugee policies being seen by the Chinee government as too lax. China believed Canada to be a safe haven for Chinese criminals. Notably, for China the prime example of this assertion was Lai Changxing, a high-profile Chinese fugitive convicted of running a multi-billion dollar smuggling operation, who had evaded Chinese authorities and had gone to Canada, where he resided in Vancouver. Lai Changxing was eventually extradited to China from Canada on July 22, 2011, after a 12-year legal battle, and later sentenced to life imprisonment. (The Lai case outcome is addressed in detail the 2003 chapter, January 24.)
After a decade of advocacy, in 2009, then Prime Minister Stephen Harper announced during a landmark visit to China that the Chinese government granted Canada ADS. The announcement was made following a meeting that the PM had with then Premier of China, Wen Jiabao, underscoring the high profile and political nature of the matter. ADS approval led to a tourism boom from China into Canada, making China one of the largest sources of overseas tourists before the pandemic, with over 700,000 visitors annually. Based on various sources, Chinese tourists were spending on average over $3,000 per trip, making a significant contribution to Canada’s economy. The outbreak of the COVID-19 pandemic led to a suspension of ADS by China for all countries, but in 2023, when Chima announced the resumption of outbound tours to 78 countries, including the United States, Canada was left off the list of ADS countries, highlighting again the highly political nature of ADS and China’s willingness to instrumentalize ADS to convey messages or exert pressure.
In response to media inquiries about China’s rationale for excluding Canada, the Chinese embassy in Ottawa raised as an irritant allegations of “Chinese interference” (in the Canadian political processes) and noted the concern of Chinese government over the safety of Chinese citizens when they travel overseas.
AVIATION TRAINING
It became clear to me that China was confronting major bottlenecks in its capacity upgrade plans to support air transportation demand. This is reflected in the fact that the industry has both a ‘hardware side’ and a ‘software side’: the first consisting of airports, aircraft and other associated infrastructure and equipment needs. The software side of the ledger includes management and operational expertise in the management of airports, and the concomitant need for personnel management training.
At the outset of the implementation of Deng Xiaoping’s ‘Reform and Opening’ mega-strategy, China did not have a strong general aviation sector that could serve as a training ground and incubator for commercial aviation, domestic and international. The United States and Canada have a long history in general aviation. For instance, in Canada, airlines aircraft represent only around 2% of the total number of aircraft registered. The rest are private registrations, as well as commercial registrations, but non airlines operated. In the United States, more than 90% of the roughly 220,000 civil aircraft registered are general aviation aircraft. More than 80% of the 609,000 pilots certificated in the United States fly general aviation aircraft.
According to the CAAC, as of December 31, 2020, China had 523 general aviation companies with 2,844 aircraft and a total of 3,781 pilots for general aviation. The contrast was even starker when I moved to China. General aviation was underdeveloped in China and could not act as a talent and skill feeder for commercial aviation, the way general aviation could do in Canada and the United States.
My Trade Section colleagues and I, at the Embassy and Consulates, started to investigate in earnest the aviation skills needed in China and more specifically for airline pilots. We embarked on an investigation that led us to meet with CAAC, Chinese airlines and Chinese aviation training institutions in several locations across the country.
We initially focused on Air China, China’s national flag carrier. We learned that Air China was dispatching students for ab initio flight training to three schools: Guanghan Flying School in Sichuan Province attached to CAAC, Spartan School of Aeronautics in the United States and BAE Systems Fight Training School in Australia. Guanghan Flying School used to be the sole domestic flight training school accredited by CAAC for ab initio flight training for airlines. In other words, in the industry parlance, it was the sole school in China offering Airlines Transport Pilot License (ATPL). The capacity of school was insufficient to meet the needs of Chinese airlines, hence airlines were sending every year a large number of students abroad, in the hundreds. Air China alone was sending more or less 100 students a year, depending on operational needs, to different schools. Chinese airlines were directly recruiting students from high schools and paying all the training fees to train these students from scratch to become airline pilots, a practice which was not common in other countries. The pace of growth in China required airlines and regulators to act with alacrity and they could not rely on a thriving domestic general aviation sector as a training ground or source of skills.
We also learned that Air China was collaborating with the Civil Aviation University of China (CAUC), based in Tianjin, in contriving a new program for ab initio pilot training. I went to visit CAUC on several occasions to collect information and assess the opportunities for Canada. CAUC, under the direct management of CAAC, was the largest aviation training institution in China for all aspects of aviation. The program that Air China put together with CAUC consisted of two years at CAUC for theoretical training and two years abroad for practical flight training. Foreign pilot training schools were being assessed and short listed as potential partners. The demand was substantial, estimated at 120-150 students every year to be sent abroad through this joint Air China CAUC program.
For many flight training schools in Canada, such volumes would represent a bonanza, as typically, they were used to enrolling students in Canada one at a time, paying individually their own way for initial pilot training. The prospect of receiving cohorts of students, each numbering between 10 and 30 students, was for some schools extremely attractive.
There were conditions of course such as obtaining CAAC accreditation – Civil Aviation Regulations (CAR) Part 141 modeled on Part 141 U.S. FAR. Schools had to be able to offer ATPL and demonstrate a solid track record.
To pursue and seize the sizeable aviation training service opportunities available in China, and building on our extensive market research and probing, the Canadian Embassy decided to organize a large but focused Aviation Safety and Training Mission to China. The Delegation would visit the leading economic and aviation centers in China: Beijing, Chengdu, Shanghai and Guangzhou. There, the Delegation members would meet, variously, with regulators, airlines, airport authorities and aviation colleges. We enlisted 18 Canadian organizations for the mission, which took place in the fall of 2024. The firms and schools were from across the country and included Abbotsford Flight Centre, Aviation Strategies International, British Columbia Institute of Technology, Canadore College, Centennial College, Concordia University, Mechtronix Systems, Montair Aviation, Southern Alberta Institute of Technology, Selkirk College, Seneca College, Red River College and TTA Technology. Large firms, namely Air Canada, Bell Helicopter Textron Canada, Bombardier, CAE and Pratt & Whitney Canada, supported and participated as well.
Over and above delivering specific business opportunities for each of the Canadian participants, the overarching goal was also to position Canada as a partner of choice for China for solutions to address the county’s aviation needs and support its growth. I expected longer term benefits from a branding and reputational point of view but also for our broader aviation interest in a market where government interventions were prevalent and government approvals were needed for a wide range of activities in aviation, including purchasing equipment like aircraft, investments and joint ventures, and training partnerships. We were aiming, with his mission, for:
“yijuliangde” (一举两得) or “one move two gains”,
“shibangongbei” (事半功倍) or “half the work, twice the effect”.
I thought even Canadian firms not present in the mission could benefit from the positive impact that I expected this mission to generate through our engagement with several key players.
In the 1990s, the Canadian International Development Agency (CIDA) implemented a human resources development approach to deliver Canadian Official Development Assistance (ODA) to China, focusing on training programs, including programs related to aviation. Numerous CAAC officials had mentioned to me how these programs had been useful and had left them with a lasting positive impression of Canada. I am uncertain whether from an economic perspective, Canada was ever able to capitalize on the goodwill the programs had created. Whether this translated into business benefits was difficult if not impossible to track and quantify. However, these programs laid out a foundation upon which we could build and strengthen relationships with key officials at CAAC. My view is that we could accomplish the same with trade missions like the September 2024 Aviation Safety and Training Mission we had organized. Supporting capacity building would generate enduring impact and longer-term downstream benefits for Canada’s aviation sector.
Our competition, specifically the United States and the European Union, were also emphatically engaged with China in aviation capacity building.
The United States’ Federal Aviation Administration (FAA) and CAAC launched in 2004 the U.S.-China Aviation Cooperation Program (ACP). Throught this program, FAA and the U.S. industry were working with CAAC and the Chinese aviation ecosystem, i.e. Chinese airlines, airports, associations and research institutes, to reinforce safety, capacity and efficiency in China’s aviation system. The program was co-chaired by FAA and Boeing and included several corporate members. Each year, ACP programs were providing substantial financial assistance in the form of training, studies, technical assistance, orientation visits to the U.S. and workshops.
The European Union was also pursuing aviation technical, safety and economic collaboration in aviation with China. Conferences and workshops were held since 1999, and eventually, in 2010, they formalized their cooperation through the creation of the EU-China Civil Aviation Cooperation Project (EUCCAP) and then in 2016 through the launch of the EU-China Aviation Partnership Project (APP) managed by the European Union Aviation Safety Agency (EASA) and the Civil Aviation Administration of China (CAAC).
We needed to somewhat match or respond to these initiatives and level the playing field for Canadian businesses. The Canadian Aviation Safety and Training Mission was meant to go to some distance towards that goal. However, it was only a step, albeit a meaningful step. We also had in mind creating a more permanent mechanism to encourage these exchanges, which we succeeded in doing a few years later by negotiating in 2009 a Memorandum of Understanding between DFAIT and NDRC regarding the aviation industry, becoming the first country to conclude such an MOU directly with the immensely influential NDRC.
The MOU was very comprehensive in scope touching on aerospace industrial cooperation, civil aviation policies, aviation, airport and air traffic control equipment, simulation technologies, maintenance, repair and overhaul, supply chain and technical training. The MOU also flagged specific programs for joint support, including Bombardier’s C Series and Q400 programs, for which Bombardier was planning to carry out manufacturing of structural parts in China and aiming at increasing China sales, China’s Modern Ark (MA) program, a turboprop aircraft developed by AVIC powered by Pratt Whitney Canada engines, as well as helicopters and aircraft parts.
The MOU set forth the establishment of a Canada-China working group that would be responsible for the implementation of the agreement. If it was not for years of investments in relationships with ministries like the NDRC and CAAC, concluding this MOU would not have been possible. More specifically, the High-Tech Department of the NDRC was the driving force behind the MOU. The MOU came about after many exchanges with the director general of the department and his colleagues over the course of my first and second postings to Beijing, and after the commitment we had shown to present solutions for China’s challenges in aviation, by matching Canadian capabilities with Chinese needs, with missions such as the Canadian Aviation Safety and Training Mission.
The mission also produced some more immediate results. One of my managers at Global Affairs Canada once told me that even if only one participating company succeeds in clinching a contract, it makes a trade mission worthwhile. There was wisdom in this comment, in that diversifying markets or exporting, or breaking into a difficult market like China, was no easy feat for many Canadian firms. Yet, my goal was to have a higher success rate.
During the Canadian Aviation Safety and Training Mission, Montair Aviation from British Columbia signed an MOU with Xiamen Airlines and applied for CAAC approval. Other arrangements were concluded for airport and air traffic control training. In the following months, the Canadian Embassy proactively approached other flight raining schools in Canada like Moncton Flight College and supported them in China to connect with airlines and CAUC and obtain CAAC accreditation.
Over time, Canada became one of the main foreign destinations for Chinese airlines pilot training, and schools such as Montair Aviation and Moncton Flight College ramped up capacity to be able to receive Chinese airlines students. The Canadian Embassy was instrumental in positioning Canada upstream vis-à-vis this growing training demand in China and as solution partner to address this bottleneck; again, all this also for the benefit of our overall aviation interests in China.
THE AIR SERVICES AGREEMENT
Sun Tzu, China’s ancient military strategist and philosopher, once said “know the enemy and know yourself; in a hundred battles, you will never be defeated.” He also proffered this piece of advice – “appear weak when you are strong and strong when you are weak” – which is believed to have inspired Deng Xiaoping’s guiding principle for foreign policy “hide your strength, bide your time”. It is widely recognized that under Xi Jinping, China has essentially dropped this principle and has adopted a much more assertive stance on the international scene.
In the first decade of the millennium, these principles were applied more regularly. I witnessed, in a front row seat, an excellent demonstration of how these could be put in practice, when I partook in 2004 the negotiations for an updated air services agreement between Canada and China. As a Canadian Embassy officer, I had the responsibility to support these negotiations to modernize the 1999 Canada-China air services agreement which limited flight frequencies between our two countries to a few daily flights by carriers on each side. China was using barely half of its allowed capacity back then, and Canada was close to maxing out its allocations for daily Vancouver/Shanghai and Vancouver/Beijing flights.
Looking at the staggering growth that China was exuding on the economic, tourism and air traffic fronts, Air Canada had ambitious plans to grow its services between our countries. Air Canada has its eyes set on initiating direct connections between Toronto and Beijing and between Toronto and Shanghai. There were other Canadian players, like Harmony Airways and Cargo Air, then interested as well in initiating and expanding passenger and cargo flights between Canada and China.
Heading into the third year of my posting to China, I had a built a strong relationship with the CAAC working on several initiatives, some described above. Several large Canadian firms were carrying out projects in China requiring CAAC involvement, including Bombardier, CAE, Bell Helicopter Textron Canada and Pratt & Whitney Canada. There were also multiple smaller Canadian companies, like those referred to above, who were exploring opportunities in China, such as in the training field. All these vectors for collaboration, business and sales that had to go through CAAC, for endorsement, approvals or negotiations. This had helped the Canadian Embassy to build solid ties with several CAAC officials at various levels.
The CAAC Director General for International Cooperation for China was Mr. Wang Ronghua, an experienced official who had the task of leading engagement with the international community. He had served in this capacity for over ten years and was known as being well learned and engaging but also cryptic at times. This may be due in part to the fact that he spoke an accented Mandarin that we could trace back from his “laojia” (老家) or native place in Shandong Province. The accent of foreigners speaking Mandarin was often compared to that perceptible in the Mandarin spoken in Shandong Province. This was highlighted to me, tongue-in-cheek, by my Mandarin teachers, when I was studying the language. In fact, one of my most consequential teachers, during my language training, was Mr. Liu Lian who came from Shandong. He had designed the curriculum we were using at the Canadian Foreign Language Institute to learn Mandarin and had the uncanny ability to explain in simple terms, and with disarming logic, ostensibly complex sentence structures.
The Civil Aviation Minister was Yang Yuanyuan, a former pilot. He was appointed by the Chinese government in that position in 2002. He was referred to in the industry as “Triple Y” and was considerably respected for his liberal policies. He was indeed seen as a reformer.
The protagonists also included Canada’s Chief Air Negotiator, Mr. John McNab, a consummate, soft spoken diplomat and affable colleague, as well as Air Canada’s Vice-President for International Affairs, Mr. Yves Dufresne, an accomplished executive and a constant and skilled presence in air negotiations.
Completing the cast was Dr. Liu Fang, Director of International Affairs and Cooperation at CAAC. She supported M. Wang Ronghua who would be leading the negotiations. We had developed a solid working relationship. She later moved to Montreal to join the International Civil Aviation Organization (ICAO) in the translation service department. A few years after joining ICAO, she was appointed in 2015 as Secretary General of ICAO and served two three-year terms in that capacity. Her appointment and elevation coincided with China’s push to gain more influence within international organizations. At some point in time during Liu Fang’s tenure at ICAO as Secretary General, Chinese nationals were heading four of the 15 principal agencies of the UN and were deputies in nine other agencies.
We expected the air services negotiations with CAAC to be long and arduous, given that Chinese airlines were behind the curve in terms of frequency utilization, compared to their Canadian counterpart, Air Canada. They had scope to grow within the parameters of the existing agreement. Consequently, we anticipated fierce resistance of Chinese airlines to pressure from the Canadian side to augment frequencies in support of Air Canada’s expansion plans.
China aviation safety record had markedly improved, with accident rate declining sharpy in 2000s compared to 1990s despite more flights operating in China. China was very active learning from Europe and the United States through partnership initiatives like the ACP previously mentioned. Concurrently, China also adopted a protective stance for its firms and industries. Moreover, the airlines industry overall around the world, is arguably one of the most protected and managed. Open skies agreements exist, but it is not uncommon that frequencies and slots to non-domestic carriers are conferred in dribs and drabs, and domestic flights (or what is called cabotage) are by and large off-limits for non-domestic airlines. Such stringent foreign ownership limits often exist to shelter domestic carriers from foreign control or takeovers.
As we were heading into the first round of negotiations that was scheduled to take place in Beijing in April 2004, an unprecedented level of interest permeated the Canadian side. Canadian airports wanted in and they had written through their association, the Canadian Airports Council (CAC), a letter in this regard to the Canadian government, pressing for a seat at the negotiating table. Airports did not usually participate directly in air negotiations. In some way, their interests may not always be fully aligned with those of Canadian airlines. They can even be at odds, as simply put, more traffic or air services, irrespective of where the airlines delivering this growth come from, could be positive for airports, as economic hubs. In fact, Canadian airports were approaching Chinese carriers to woo them to commence air services to their cities. Although ultimately CAC was not allowed to sit in the negotiations in Beijing, we agreed to debrief them in person after each day. Accordingly, the head of CAC travelled to Beijing to follow more closely the negotiations and be on hand should any consultations with airports be necessary.
There was also much enthusiasm on the part of Canadian cargo and start-up airlines. Cargo Air and Harmony Airways attended the negotiations. Despite the fact China was not using up their allocations under the existing air services agreement, Chinese operators also showed up in force for the negotiating round, a sign that they were seeing longer-term potential in air services to and through Canada. In addition to the “big three carriers, Air China, China Eastern Airlines and China Southern Airlines, smaller airlines like Sichuan Airlines, Shanghai Airlines and Hainan Airlines took part in the talks.
Beyond rights or fifth freedom rights emerged as area of focus, as Chinese airlines were considering flying through Canada to Latin America, bypassing the U.S. as a transit point. With existing equipment gage, direct flights between China and destinations in Latin America were not possible at that time.
Amongst other issues to address, there was a three percent business tax that Air Canada was facing in China over ticket sales turnovers. We wanted to solve this for Air Canada and Canadian interests, as this tax had been waived for other foreign airlines, competitors of Air Canada. It is a matter that the Canadian Embassy in Beijing has been advocating for with the Chinese government for some time, particularly with CAAC, the Ministry of Commerce and the State Taxation Administration (STA).
Against all odds, in a matter of days, we wrapped up the negotiations in one single round and successfully concluded an updated air services agreement that provided for limited fifth freedom rights, a key ask from the Chinese side, and a major increase in frequencies to be gradually effected, to reach, after a few years, 66 flights a week on each side. More cities were to be designated on each side under the amended agreement. The new agreement led to a significant expansion of air services between our countries, and enabled Air Canada to launch new services to China from Toronto.
The three percent tax on revenues was also waived for Air Canada and Canadian operators, as part of the final negotiated package. This was also a significant win for the Canadian side. Needless to say, the outcome was excellent for Canadian business interests and the Canadian economy which air services enlargement between China and Canada would support. Air Canada and other stakeholders were extremely appreciative of the support received from the Canadian government and the Canadian Embassy for an unexpected upshot in one single round of negotiations.
No doubt, the result was a function of some deft negotiation skills from an experienced Canadian team led by Mr. John McNab. It was a well-oiled machine, supported by both DFAIT and Transport Canada officials, that at any given time was concurrently handling multiple sets of air services talks with different countries.
In all modesty, the Canadian Embassy also played crucial role, particularly in accelerating the negotiations. Negotiation sessions were often pro forma. Some of the real negotiations were taking place between the formal sessions, often in the evenings through phone calls. Mr. Wang Ronghua’s comments were often difficult to decipher. We had to be able to read between the lines and interpret and address his questions and concerns. Actual advancements were by and large achieved through exchanges with Dr. Liu Fang, who would at times validate with Mr. Wang some of our assumptions, and convey messages to us and also to Mr. Wang, between the meetings. She was instrumental in helping us understand the context, the pressures they were under, the overtures, their bottom lines and their motivations.
What’s more, being able to interact in Mandarin in these informal sideline calls enabled us to be readier the next day for formal talks, in front of all the participating airlines. They were conducive to the swapping of more candid views and comments that had the effect of significantly stepping up the pace of the negotiations.
The resolution of the business tax matter required much preparatory work, in advance of the negotiations. We had visited in the weeks leading up to the air talks both CAAC and STA to have a firm grasp of who was the real decision-maker on the matter and to clearly lay out our arguments. We anticipated that the air talks could act as the catalyst to get the matter resolved, albeit the responsibility fell within the remit of another administration. In the end, we succeeded in securing CAAC’s support, so they could include the resolution of the issue in the broader air negotiations and agreement. This way, all the outstanding matters could be addressed in one fell swoop.
However, there were other forces at play explaining the result we obtained. The Chinese government was willing at times to utilize international pressure on its industries to accelerate reforms and enhance their competitiveness, by exposing them to competition, rather than sheltering them from it.
For Minister Yang Yuanyuan and CAAC, this was the natural next step to all the changes they had brought forward to build a first-rate air transportation system, on par with those that underlie the U.S., Europe, Canada and other advanced economies. Doing this may have been at variance with the views and the short term interests of their domestic firms, however they still pressed ahead, going by the adage: 长痛不如短痛 / “changtong buru duantong” (“short term pain for longer term gain”).
The willingness on the part of China to conclude an expansive air services agreement with Canada was a harbinger of more to come. Shortly after the signing of the updated China Canada air services agreement, a new similarly liberal air deal was signed in July 2004 between the U.S. and China. The new agreement permitted each country’s carriers to serve any city in the other country, and also unlimited code-sharing between U.S. and Chinese airlines. The agreement led to more negotiations between the U.S. and China to liberalize further air services between the two countries. CAAC also signed open skies agreements with countries like Thailand with Germany.
This liberal view, and less protectionist attitude vis-à-vis Chinese airlines, also had their roots in favoring a broader outlook on what constituted China’s national interests, heeding the interests of airports as well and the economy in general. The economy at large stood to benefit from more air traffic and more air transport offerings and connections. Introducing more competition compelled Chinese airlines to quicken operation and management modernization. The agreement with the U.S. led to the designation of several new entrants, as well as assignment of frequencies to them. Polar Air Cargo, Continental Airlines and American Airlines joined the ranks of the incumbent airlines from the U.S. servicing the Chinese market (United Airlines, Northwest Airlines, FedEx and UPS). No doubt, these new entrants would exert on the domestic players intense competitive pressure.
This was the principle of “hide your strength, bide your time” in action. Reforms to create an air system and network adhering to the highest standards of safety and performance were in full swing. Some aspects of these reforms were more visible, like the commercialization and consolidation of air operations such as airports and airlines, and some were less obvious even to the keener eyes. Modernizing Chinese airlines and making them more resilient and competitive, through increased international pressure and competition, fell in my view in that category, because such moves appeared at face value counterintuitive, at least from the point of view of the shorter-term interests of the state-owned entities that China sought to protect and nurture.
CONCLUSION
This patience and proclivity to play the long game have given China an edge in many areas, including rare earth and clean technologies like electrical vehicles. Political cycles are shorter in our system of government. One may wonder whether this may impact our ability to develop long-term strategies with benefits to bear out much later, beyond the current political cycles. We should be mindful of this predicament and somewhat seek ways to compensate accordingly, by for instance, doubling down on efforts to think and plan longer term and depoliticize that process.
Air services agreements between China and the world were largely suspended during the pandemic. Resumption of air services agreements took place by fits and starts. All sorts of considerations came into play, including reciprocity, protectionism and competition. The inability to use Russian airspace put Canadian carriers, notably Air Canada, at a competitive disadvantage relative to Chinese carriers who do not face such restrictions. This constraint would prolong flights operated by Air Canada by more or less two hours.
Air services talks remain as complicated, political and critical as ever. Connections between nations depend on these. As a Canadian diplomat, I participated in putting up the construct that guided these for several years between Canada and China. Through my work at the Canadian Embassy promoting Canadian interests and economic ties between our two countries, I saw first-hand how an emerging economic powerhouse leveraged a vast array of policy tools and measures to achieve its goals, some of them that looked then so distant, only to realize that the future is right here before our eyes. The “big three” Chinese airlines are, by any measure, now ranked in the top ten airlines worldwide. China is the largest global market for commercial airline purchases. Aerospace would remain, for several nations, a strategic playing field where substantial business interests, government industrial, foreign and trade policies, competing national interests and politics constantly rub shoulders. China has certainly been a prominent actor in this field, and navigating all this in my eight years in China working for the Canadian government, to help create a productive space for Canada and Canadian economic interests, was both immensely fascinating and motivating.
ChinaGov
Accompanied Senator Dan Hays and Delegation for their meeting with Li Ruihan, Chairman of the Standing Committee of the National People’s Congress, the highest legislative body.
Delegation meeting and dinner with PRC Premier Li Peng at the Great Hall of the People.
Tuesday, October 16 – Monday, October 22
APEC Leaders’ Meeting in Shanghai, and subsequent PM Official visit.
I attend as Senior Official.
PMJC BT&I
Subsequently, Prime Minister Chrétien visited the Atomic Energy of Canada nuclear power facilities in Qinshan, and expressed the hope and expectation that future projects with the China Nuclear Corporation at Qinshan would be in the offing.
With the State Development and Planning Commission, he supported Bombardier’s proposed sale of 35 regional jets to China Eastern Airlines. He participated in events celebrating the planned opening of Sun Life/Everbright sales office in Tianjin and Manulife’s launch in Shanghai. And he promoted Canadian eligibility – and interest among Chinese tourists – for the granting of Approved Destination Status for Canada.
Friday, October 19
Letter from APEC Chinese Taipei’s Senior Official criticizing China’s decision not to allow Taipei’s attendance at the APEC Leaders’ Meeting.
Wednesday, October 24
My final report, as APEC Senior Official, to PM’s Foreign Policy Adviser, Claude Laverdure, as well as DFAIT Deputies on the Shanghai APEC Leaders’ Meeting, including notes for the PM’s press conference, and on APEC’s achievements, weaknesses and future directions, as the departing Senior Official.
I am proud of this report. I think it captures what Canada has accomplished – and not yet succeeded – in APEC and provides advice for my successor…who may or may not have acceded to it. The file in the Archive includes a detailed copy of the report and recommendations for the future.
Letter to China Daily Editor-in-Chief Zhu Yinghuang regarding his paper’s support for the Terry Fox Run.
Exchange with the Director of the Korean Studies Program, UofT, Professor Young Yoo regarding my appointment as non-resident Ambassador to the DPRK.
Arts&Culture CdaGov
Letter to Heritage Canada Deputy Minister Alexander Himelfarb outlining GoC and Embassy programs of interest to him and his department, specifically, the Embassy and Consulate activities in the promotion of Canadian values, culture and the arts. The letter also includes reference to China’s ‘far-reaching changes’. It also invites DM Himelfarb to undertake an early visit.
Email to MP/Saanich Gary Lunn regarding the Prime Minister’s visit to China, in which Lunn also participated.
Exchange with Trade Director Ong Ye Kung of the Singapore Ministry of Trade and Industry. Ong Ye had served in Canada.
Exchange with Vancouver Kingsway MP Sophie Leung on my appointment as Ambassador to the PRC.
Exchange with Kishore Mahbubani, High Commissioner of the Republic of Singapore to Canada and Permanent Representative at the United Nations, congratulating me on my appointment to Beijing, and reflecting on our cooperation on bilateral Canada/Singapore relations.
Over many years, Kishore and I have crossed paths and developed a close friendship. I ‘knew’ Kishore before we eventually met when he was non-resident High Commissioner to Canada and I was ADM for Asia: one day, while in Singapore, I was wandering around the superb Kinokuniya book store, where I came across Kishore’s ‘Can Asians Think?’, a provocative reflection on the paucity of knowledge in the West and its condescending attitudes regarding public policy and intellectual debates in the broad region that is Asia, one that had already achieved remarkable economic and social success. I bought the book and was impressed. (Kishore’s ‘Has China Won?’, published in 2020, is also a must-read.) I am pleased that we have enjoyed close working and personal relations.
Thusday, October 25
BT&I
On the occasion of the China Trade Program Senior Trade Commissioners Meeting, I host a reception at the OR for 39 CBS and LES working in the Trade Section.
Friday, October 26
BT&I
Letter from Manulife’s Vice President for Regional Operations in Asia, Marc Sterling, in follow-up to PM Chrétien’s participation in Manulife-Sinochem’s 5th anniversary celebration in Shanghai, and the progress the MSL had been making in securing the opening of the second office in Guangzhou.
Education
Copy of letter to UofOttawa Faculty of Administration’s Dean Kelly re their aspirations and plans to attract students from China.
HR&RoL
Remarks for the Sino-Canadian International Conference on the Ratification and Implementation of Human Rights Covenants. Beijing.
- the file provides a list of Chinese academics and public servants studying non-Chinese HR and Rule of Law concepts.
- it also flags Chinese signature to the UN Covenants on Civil and Political Rights, as well as the Covenant on Economic, Social and Cultural Rights, which it had ratified.
Saturday, October 27
Terry Fox Run at Qinghua University.
Sunday, October 28
Vancouver’s Panago Pizza launch in Beijing.
BT&I
As ‘guest speaker’, I recall inter alia the amusement of the audience as I described Panago’s pizzas in my version of Mandarin.
Monday, October 29
BT&I
Letter to China Yangtze Three Gorges Project Development Company CEO Lu Youmei, introducing him to Kryton Person, a Chinese Canadian joint venture which manufactures and distributes concrete waterproofing materials.
Agric
Letter to Agriculture and Agri-food Canada Deputy Minister Samy Watson briefing him prior to his planned Nov 3 to 8 visit to China and flagging some of the principal opportunities and equally evident risks to Canadian agricultural interests as China joins the WTO. It also asks for additional human resources from AgCanada to meet the forthcoming marketing and defensive objectives.
It can be said that trade in agricultural and sea products is one of the bedrocks of Canada’s commercial relations with China, and thus merits flagging as a ‘Topic’. China’s adherence to the World Trade Organization – legally, to begin in December – would expand market opportunities for exports of Canadian wheat, barley, canola and processed products including meats, canola oil, seafood products and processed food and beverages. That said, opening markets can be very disruptive to existing producers in China, and we had to expect protective measures to appear, such as in complex sanitary and phytosanitary rules, differences in ‘interpretation’ of tariff rate quotas and scheduling, WTO noncompliant administrative measures, GMO policies and so forth, all of which required close monitoring. To be fair, it should be added that these types of wranglings are universal in international trade: we could not expect that China would act any differently than other countries in seeking to protect their markets from competition.
BT&I
Letter to China Academy of Building Research Senior Engineer Professor Li Yinqing, thanking him for meeting to discuss the history and development of China’s building codes.
Meetings:
- China Academy of Building Research briefing on China’s National Building Code.
- Bombardier CEO Bob Brown.
Tuesday, October 30
Reception at Official Residence for the Canadian Ball patrons.
List of Patrons provides a snap-shot of some of the Canadian businesses active in Beijing.
BT&I
I accompanied Bombardier President Bob Brown to meetings with State Development and Planning Commission Chairman Zeng Peiyan, Vice Minister Long Yongtu, MOFTEC, and Beijing Mayor Liu Qi.
Dinner in honour of the visit of Bombardier President and CEO Bob Brown.
Guest list – 45 attendants in total – provides a snapshot of the scope of Bombardier’s businesses in the PRC.
Wednesday, October 31
Letter to Speaker of the Senate, the Honorable Dan Hays regarding follow-up to his visit to China, and the cancellation of a planned visit to the DPRK.
Separate letter to the good Senator regarding JDS Uniphase and their interests in China.
Wednesday, October 31 – Thursday, November 01
CdaPs&Ms
To Shanghai for BC Premier Gordon Campbell official visit, including promotion program with the Council of Forest Industries of BC.
I was quite at home on this visit, given a long relationship with COFI, which included, thanks to a Leave Without Pay (LWoP) agreement with the Department, a stint as Manager for Asia, based in Tokyo, from the summer of 1983 to summer of ‘06, covering Japan, South Korea and Taiwan, after which I returned to DFAIT and headed the Canadian Embassy’s Political Section, as Political Counsellor.