URBAN DISPATCH #1 – HARNESSING THE SMART POWER OF CITIES

Issue

Canada-China bilateral relations have reached crisis levels less than two years after both countries appeared destined to enter formal trade negotiations. Diplomatic tensions escalated following the 2018 arrest of a Huawei corporate executive and what seems to be China’s retaliatory arrest of two Canadian citizens. The Canada-China Legislative Association is in China in an effort to open channels of communication. However, it is clear the Canada-China bilateral relationship needs a strategic rethink.

Background

Both Canada and China have benefitted from the institutions and rules of the international order. A late developing country, China capitalized on its ability to access foreign technology, capital, and managerial expertise to modernize the economy. Continued access to foreign expertise is critical if China is to realize its long-term development asipirations. Similarly, Canada is a trading nation with a small population base that is heavily dependent on the competitiveness of global exports for its economic prosperity and security. It is imperative that Canada continues to engage with China, despite mounting diplomatic tensions and public anxiety.  

Analysis

• Nothing is inevitable about China’s future economic and social development. China will be challenged to achieve its ambitious growth targets as it approaches global scientific and knowledge frontiers.
• Thinking more systematically about China’s strengths, weaknesses, and strategic culture will provide valuable insights about how Canada can leverage its influence as a secondary global power and promote the enabling conditions for a more progressive foreign policy agenda. The current situation also calls for the dynamic application of policies and programs mobilized to generate new synergistic capabilities in both countries.
• Cities have always been crucibles of human ingenuity and creative innovation. Today, cities function as gatekeepers to international capital, advanced technology, complementary research institutions and world-class talent – key indicators of innovation capacity.
• Canadian universities, innovation districts, and enterprising organizations capable of synthesizing local experience and technological know-how are best placed to engage strategically with China’s next-generation political and business leaders. Harnessing the unrealized potential of city-to-city diplomacy may also avoid worst-case scenarios in the near-term future and open-up new pathways for improved political dialogue.

Considerations

1) China’s total urban population is currently 650 million and expected to rise to 1 billion (or 70% of the total) by 2030.

2) Canada’s diplomatic presence is particularly weak in the 2nd and 3rd tiered cities, the most dynamic part of the country where Canada’s and China’s economic interests are closely aligned.

3) China aspires to become an international education hub, with ambitious designs of attracting 500,000 foreign students by 2020.

Conclusions

China has changed dramatically since 1970, when Canada first established diplomatic relations bringing it out of international isolation. While China has achieved remakable success in modernizing its economy, it also faces considerable challenges moving forward. Whether China successfully transitions to a knowledge-intensive economic model hinges on the interdisciplinary thinking and managerial competencies that it can muster in areas such as: sustainable development, health care sciences, institutional reform, municipal financing, and urban design. That plays to the long-term, strategic advantage of Canada’s cities.  

VSIR Urban Dispatches summarize and clarify contemporary city-related trends, strategic management issues, and research questions. This brief is intended to provide VSIR clients and interested readers with relevant insights that support of timely and informed decision-making. Vancouver Strategic & Integrated Research is a catalyst for strategic analysis, interdisciplinary research, and organizational learning. Further research and analysis of the issues discussed in the Urban Dispatches can be provided upon request. Please forward any correspondence to grant@vancouverstrategicresearch.ca.