Canada and China
Killing the chicken
A Sino-American row hurts Canada
Just hours before opening a flagship store in Beijing in December, Canada Goose, a maker of expensive parkas, cancelled the event. The proudly Canadian firm, based in Toronto, blamed delays in construction. More likely, it wanted to avoid protests against the arrest in Vancouver on December 1st of Meng Wanzhou, the chief financial officer of Huawei, a Chinese maker of telecoms equipment. She is also the daughter of the firm’s founder, Ren Zhengfei. Shares in Canada Goose have fallen by more than 20% since news of Ms Meng’s arrest.
Like the company, Canada itself is caught in a fight between the United States and China. Canadian police arrested Ms Meng on her way to Mexico under the terms of an extradition treaty between Canada and the United States. An American judge sought her arrest, alleging that Ms Meng committed fraud in order to violate American sanctions against Iran. China (and Ms Meng) claim the charges themselves are fraudulent. The United States fears Huawei, a hugely successful supplier of the equipment needed to build “fifth-generation” mobile-telecoms networks. It is suspicious of its ties with China’s government. (No Chinese company as big as Huawei is free of Communist Party influence.) China contends that Ms Meng’s arrest is meant to undermine the company.
Rather than retaliate against the United States, which is waging a trade war against it, China is punishing Canada. Citing national security, it has detained two Canadians, Michael Kovrig, a diplomat on leave who is advising the International Crisis Group, an NGO that tries to prevent conflict, and Michael Spavor, a businessman. According to a person familiar with the situation, Mr Kovrig is being questioned “morning, afternoon and evening” and is not allowed to turn the lights off when he sleeps. David Mulroney, a former Canadian ambassador to China, said in a television interview that China is using an established tactic of “kill the chicken [Canada], scare the monkey [United States]”.