‘Boy Scout’ Canada caught in a nasty fight between two superpowers

  • By detaining a former Canadian diplomat, Beijing is telling Canada it must expect to pay a severe penalty whenever it acts as a vassal state of Washington in targeting China’s interests
PUBLISHED : Wednesday, 12 December, 2018, 7:46pm
UPDATED : Wednesday, 12 December, 2018, 10:08pm

Two predictions made by some old China hands immediately after the arrest of Huawei’s No 2 Sabrina Meng Wanzhou in Canada have turned out to be wide of the mark. One is that it will throw Beijing off-balance by complicating its unwanted trade war with the United States. Another is that it will be open season on American executives in China.

Instead, a former Canadian diplomat, Michael Kovrig, has been detained on the mainland. That makes good sense from Beijing’s perspective.

Wall Street and the American tech giants are among the most vocal opponents of US President Donald Trump’s trade war. Top executives from such high-powered financial firms as Goldman Sachs, Morgan Stanley and Blackstone have been openly working as go-betweens for Beijing and Washington in an effort to moderate both sides’ demands.

That was what led to an outburst last month from hawkish White House trade adviser Peter Navarro, who disparaged them as “unpaid foreign agents” and their effort as “so-called diplomacy”.

“If Wall Street is involved and continues to insinuate itself into these negotiations, there will be a stench around any deal that’s consummated because it will have the imprimatur of Goldman Sachs and Wall Street,” he said.

Chinese state security ‘is behind detention of Canadian ex-diplomat’

The last thing Beijing wants is to antagonise those titans of Wall Street and Silicon Valley by arresting one of their own. But detaining a current or former American government official will vastly complicate already tense relations.

Ever the Boy Scout, Canada has, not for the first time, walked right into a nasty fight between the two superpowers. Chinese are not stupid enough to think detaining Kovrig will make Ottawa release Meng, but they clearly want to send an unmistakable message that Canadians must expect to pay a severe penalty whenever it acts as a vassal state of Washington in targeting China’s interests.

Meanwhile, the US extradition case against Meng is turning out to put as much pressure on Washington as Beijing. Even for neutral outsiders, arresting its chief financial officer and founder’s daughter may seem excessive as part of Washington’s undeclared war to destroy Huawei. It looks increasingly like a naked American power play.

Many mainland Chinese regard the global success of Huawei with nationalistic pride. They don’t consider breaking US sanctions against Iran – something Meng is accused of – as indicative of criminal behaviour. That makes it more difficult for Beijing to back down.