Prime Minister Mark Carney and President Xi Jinping in South Korea, October 31, 2025/Xinhua

By Colin Robertson

November 9, 2025

As Prime Minister Mark Carney seeks to recalibrate Canada’s relationship with Beijing, a new realism is taking hold in Ottawa. Canada must find a middle path in its China policy that safeguards sovereignty while avoiding the swings between moral idealism and commercial opportunism that have marked its recent history.

Neither moral suasion nor naïve engagement will work. The goal must be coexistence—combining competition with cooperation while sustaining the people-to-people ties that outlast political cycles.

Mr. Carney’s recent meeting with President Xi Jinping in Gyeongju, Korea, on the sidelines of the APEC Summit was the first leader-level contact in eight years, signalling a cautious thaw. Days earlier, Foreign Minister Anita Anand met with her counterpart, Wang Yi, to tackle long-festering irritants—canola, seafood, meat, and electric-vehicle trade, along with consular and law-enforcement cooperation and the dormant Canada-China Strategic Partnership launched in 2005.

The Prime Minister’s Office described the Carney–Xi encounter as “a turning point in the bilateral relationship,” committing both sides to “renewing the relationship … in a pragmatic and constructive way.”

The tone suggests a deliberate re-entry into structured diplomacy—not rapprochement, but realism. Carney’s approach acknowledges China as both an ancient civilization and an authoritarian power with global ambitions and a mercantilist economy. The geopolitical frame is now dominated by Sino-American great-power rivalry. As Kevin Rudd, Australia’s ambassador to Washington, puts it, the task is “managed strategic competition”: avoiding conflict while defending vital interests.

For Canada, the danger is becoming collateral damage of this rivalry, more likely at this juncture because of economic events than as a result of the coercive diplomacy that Beijing deployed in the case of Huawei executive Meng Wanzhou and the two Michaels.

Former Australian ambassador to China Geoff Raby has observed that trade is “the currency of power in the Chinese system—and the instrument of punishment when politics sour.” Donald Trump has learned to wield it the same way.

The Trudeau government’s 2022 Indo-Pacific Strategy labelled China “increasingly disruptive” and promised to “challenge when we ought to and cooperate when we must.” That formula was an improvement on drift, but insufficient for the long game ahead. Carney’s emerging policy appears to rest on three truths:

1. Coexistence is necessary on transnational issues—climate change, pandemics, nuclear risk—requiring patience and realism.
2. Competition is structural and unavoidable, especially in technology, ideology, and security. We have fundamentally different approaches to governance, whether domestic or international, that make co-existence essential.
3. Connection through people and institutions must endure, even when politics freeze.

A pragmatic blueprint for ‘selective re-engagement’ should follow these principles. It would include structured political dialogue through regular foreign- and defence-minister meetings; managed economic engagement via sectoral agreements with dispute-resolution clauses; and renewed people-to-people programs in education, cultural diplomacy and provincial and municipal ties.

Carney knows public opinion has hardened. Asked during the 2025 leaders’ debate what posed the “greatest threat” to Canada, he answered in one word: “China.” The experience of hostage diplomacy, allegations of election interference (which Carney says he raised in his bilateral with Xi), and cyber-attacks has left scars. But Canadians are ready for a careful re-engagement—one rooted in enforcement of our laws. That means sanctions, expulsions, and asset freezes against those who target our institutions or citizens.

Geopolitics is also reshaping Canada’s Arctic strategy. Beijing’s 2018 Polar Silk Road white paper declared China a “near-Arctic state.” Its interests now include research expeditions and satellite surveillance. A whole-of-Arctic approach—linking defence, science, and Indigenous partnerships—must give substance to the 2024 Arctic Foreign Policy and counter foreign dual-use activities disguised as scientific or ocean research.

Retreating from trade with the world’s second-largest economy would be self-defeating. Canadian agri-food, energy, minerals, forestry, and clean technologies all depend on diversified export markets. The electric-vehicle transition exposes Canada’s vulnerability as Trump’s incentives draw production south. Chinese investment in batteries and critical minerals presents both opportunity and risk. The reformed Investment Canada Act now applies heightened scrutiny to state-linked investors. As UBC’s Paul Evans notes, the objective is not to wall-off China, but to regulate exposure intelligently.

Australia offers a useful template. Its Foreign Investment Review Board approves Chinese capital conditionally, ensuring domestic control of strategic sectors. Canada could adapt that model—welcoming investment in green technology, excluding it from telecommunications and defence manufacturing.

Neither moral suasion nor naïve engagement will work. The goal must be coexistence—combining competition with cooperation while sustaining the people-to-people ties that outlast political cycles.

If trade and security raise red flags, human connections can rebuild trust. Canada’s 1.7 million  citizens of Chinese heritage are a national bridge, not a vulnerability. Still, diaspora intimidation and misinformation campaigns must be countered. Senator Yuen Pau Woo warns that overreaction to China’s rise could do more harm than good. The coming Foreign Influence Transparency Registry must balance security with civil rights.

Education remains one of the safest conduits for engagement. University partnerships and student exchanges, properly safeguarded, foster understanding that endures beyond politics.

Tourism, too, can help normalize ties: before COVID-19, nearly 700,000 Chinese tourists visited Canada annually. Beijing’s recent decision to reinstate Canada as a preferred travel destination is a small but symbolic step toward normalization.

Human-rights issues—Xinjiang, Hong Kong, Tibet, and dissidents—remain central to Canadian attitudes. Moral clarity should be matched by tactical judgment. Ottawa’s toolkit includes Magnitsky-style sanctions, UN monitoring support, and supply-chain transparency to prevent complicity in forced labour.

The challenge is to turn outrage into results: defending principles without retreating from practical diplomacy. Canada could, for instance, give more bite to its Declaration on Arbitrary Detention or coordinate agri-food exporters so that no competitor profits when one faces Chinese sanctions.

Every Canadian move toward China must consider its implications for the US relationship. The art of statecraft lies in knowing when to align and when to diverge. Carney’s strategy aims to complement U.S. policy where interests coincide but preserve autonomy where they differ. In practice this means:

• Supporting U.S. freedom-of-navigation operations in the South China Sea while maintaining an independent Indo-Pacific naval presence through allied exercises;
• Coordinating sanctions and technology controls without embracing wholesale decoupling;
• Using multilateral venues—G20, APEC, WTO reform—to engage China collectively rather than bilaterally.

China is neither an adversary to isolate nor a partner to trust blindly. It is once again a permanent power seeking to shape the world order. Adapting to that reality requires deterrence without hysteria, engagement without illusion.

Carney’s task is to steer between the poles of containment and naïve engagement—a strategy rooted in what might be called functional realism.

Henry Kissinger wrote in On China that diplomacy with Beijing must combine ‘firmness on fundamentals with flexibility on tactics.’ Canada’s challenge is to translate that insight into policy: firm where values and sovereignty are at stake, flexible where cooperation serves mutual interests.

If Mr. Carney can sustain that equilibrium—defending Canada’s sovereignty while keeping channels open—he may succeed where previous governments have failed: forging a durable, self-confident China policy fit for a multipolar century.

Contributing Writer Colin Robertson, a former career diplomat, is a fellow and host of the Global Exchange podcast with the Canadian Global Affairs Institute in Ottawa.