Canada to boost defence, cyber security in Indo-Pacific policy, focus on 'disruptive' China

© Reuters. FILE PHOTO: Canadian Prime Minister Justin Trudeau visits members of the Canadian troops, following the Russian invasion of Ukraine, in the Adazi military base, Latvia, March 8, 2022. REUTERS/Ints Kalnins/File Photo

By David Ljunggren and Ismail Shakil

OTTAWA (Reuters) -Canada launched its long-awaited Indo-Pacific strategy on Sunday, outlining spending of C$2.3 billion ($1.7 billion) to boost military and cyber security in the region and vowed to deal with a "disruptive" China while working with it on climate change and trade.

The plan, detailed in a 26-page document, said Canada would tighten foreign investment rules to protect intellectual property and prevent Chinese state-owned enterprises from snapping up critical mineral supplies.

Canada seeks to deepen ties with a fast-growing Indo-Pacific region of 40 countries accounting for almost C$50 trillion in economic activity. But the focus is on China, which is mentioned more than 50 times, at a moment when two-way ties are frosty.

Four cabinet ministers at a news conference in Vancouver took turns detailing the new plan, saying the strategy was crucial for Canada's national security and climate as well as its economic goals.

"We will engage in diplomacy because we think diplomacy is a strength, at the same time we'll be firm and that's why we have now a very transparent plan to engage with China," said Foreign Minister Melanie Joly.

In Beijing, a foreign ministry spokesman said Canada's new strategy was "full of ideological bias, exaggerating and speculating the so-called China threat, and making groundless accusations and attacks against China".

"China is strongly dissatisfied with this, resolutely opposes it and has already made stern representations to the Canadian side," the spokesman, Zhao Lijian, added.

Prime Minister Justin Trudeau's Liberal government wants to diversify trade and economic ties that are overwhelmingly reliant on the United States. Official data for September show two-way trade with China made up less than 7% of the total, versus 68% for the United States.

Canada's outreach to Asian allies also comes as Washington has shown signs of becoming increasingly leery of free trade in recent years.

The document underscored Canada's dilemma in forging ties with China, which offers significant opportunities for Canadian exporters, even as Beijing looks to shape the international order into a more "permissive environment for interests and values that increasingly depart from ours," it added.

CHALLENGE CHINA

Yet, the document said cooperation with the world's second-biggest economy was necessary to address some of the "world's existential pressures," including climate change, global health and nuclear proliferation.

"China is an increasingly disruptive global power," it said. "Our approach ... is shaped by a realistic and clear-eyed assessment of today's China. In areas of profound disagreement, we will challenge China."

Tension with China soared in late 2018 after Canadian police detained a Huawei Technologies executive and Beijing then arrested two Canadians on spying charges. All three were released last year, but relations remain sour.

This month, Canada ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security.

The document, in a section mentioning China, said Ottawa would review and update legislation enabling it to act "decisively when investments from state-owned enterprises and other foreign entities threaten our national security, including our critical minerals supply chains."

In a statement, Perrin Beatty, the president of the Canadian Chamber of Commerce, said, "Because the region is both large and diverse, one size definitely does not fit all."

Canada’s priorities would need to be very nuanced both between and within countries, he added.

The document said Canada would boost its naval presence in the region and "increase our military engagement and intelligence capacity as a means of mitigating coercive behavior and threats to regional security."

That would include annual deployment of three frigates, from two now, as well as participation of Canadian aviators and soldiers in regional military exercises, Defense Minister Anita Anand said at a separate news conference.

Canada belongs to the Group of Seven major industrialized nations, which wants significant measures in response to North Korean missile launches.

The document said Ottawa was engaging in the region with partners such as the United States and the European Union.

Canada needed to keep talking to nations it had fundamental disagreements with, it said, but did not name them.

($1=1.3377 Canadian dollars)