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HomeCanada’s Role on the Global StageCanada Should Think Twice Before Decoupling from China in Science and Technology

Canada Should Think Twice Before Decoupling from China in Science and Technology

By Anton Malkin

Collaboration between China and Canada in matters concerning science and technology (S&T) has become an increasingly difficult proposition in the face of political estrangement between the two countries.

Canadians have two overarching concerns when it comes to working with China in both basic research and commercially oriented research activities: securing intellectual property (IP) and protecting national security. But is cutting off S&T collaboration with China likely to protect Canadian technology and make Canada more secure? In the context of today’s increasingly competitive international environment and Canada’s own domestic S&T woes, further exacerbated by the US-China technology contest and the ongoing COVID-19 pandemic, the answer is far less straightforward than headlines and popular commentary suggest.

Canada’s Dilemma

It is by now no secret that Canada suffers from chronic underperformance in research and development (R&D) output and commercialization. It not only lags behind its OECD peers in R&D intensity and business investment, but when it comes to commercialization (namely, getting commercial value for the money spent on R&D), the value of the basic research conducted in Canada tends to accrue to foreign firms.

Rising geopolitical disputes over technology, exacerbated by trade tensions and the insecurity created by vaccine and personal protective equipment shortages throughout the pandemic, are making policymakers—including those in Ottawa—nervous, and understandably so. More and more, voters are looking to their policymakers to protect them against the uncertainty and volatility that they have come to associate with global economic integration, which naturally makes the logic of ‘decoupling’ from China in S&T collaboration an attractive proposition.

These realities are dawning on Canada at a particularly bad time. An intensifying competition between the US, the world’s foremost superpower, -which also happens to be Canada’s neighbor and closest ally- and China, widely perceived to be the world’s “second superpower,” has sown distrust. Both Canadian politicians and the Canadian public have voiced their concern about researchers working with their Chinese counterparts via university partnerships and Chinese firms making R&D investments.

But before Canadians make this choice and forsake scientific and commercial collaboration with China, we should consider whether our technological and national security would actually benefit from preemptive decoupling.

Protecting Canadian Technology

In a rapidly changing world, many countries are scrambling to ensure that they are not left behind in the race to rewrite the rules of globalization. Aspects of technological globalization that were once taken for granted, like just-in-time supply chains in the advanced semiconductor manufacturing sector, were badly shaken by pandemic-induced supply shortages over the past year. Countries have been responding to these shocks and the ensuing US-China “technological cold war” by reinvigorating industrial policy in a race to protect themselves from intensifying global technology competition.

However, a defensive approach to national technological assets and decoupling do not necessarily go hand in hand. The case is often made that China is not a suitable partner in technological commercialization because the country does not sufficiently protect IP. Therefore, it is only inevitable that Canadian technology would get misappropriated or that the gains would go directly to the Chinese government or military. In reality, China’s IP protection regime has grown remarkably over the past decade. In fact, it is in China’s own interest to protect IP since the competitiveness of China’s drive for technological leadership depends on protecting the interests of intellectual property rights holders This includes foreign IP rights as foreign technology firms increasingly utilize Chinese courts to settle patent disputes.

While national security fears continue to permeate public consciousness, often with good reason, one bitter irony is that the most readily targeted firms, from DJI to the much-maligned Huawei, have achieved their success by relying on the most advanced foreign technologies, rather than heeding their government’s call to pursue self-sufficiency.

In fact, the Chinese government has been encouraging Chinese technology firms to rely more on domestic suppliers for decades. These calls have only been taken up recently, and only by sheer necessity. It stands to reason that the more Canada distances itself from China’s S&T ecosystem, the more Chinese scientists and firms will look to replace Canadian R&D and innovation output in the areas where it still commands a relative advantage—including in artificial intelligence, biotech, and carbon neutral technologies. If Canada wants to remain a global leader in basic research and to elevate its ability to commercialize its R&D output, cutting itself off from China’s technological ecosystem is the wrong approach.

Moreover, not only are leading American technology companies expanding their intellectual property footprint in China, but Canadian companies are also doing the same, with Chinese companies likewise seeking protection of their own IP assets in Canada’s intellectual property system— at a far greater rate than their Canadian counterparts. Supply chains may be de-globalizing, but S&T commercialization remains stubbornly global. Given how internationally integrated technological knowledge has become, decoupling in this area means not denying opponents the right to access Canadian technology, but ceding revenues and legal protection of our scientific assets to them—simply put, giving it away.

A Bifurcated Global Technology Ecosystem Hurts Countries like Canada the Most

Medium-sized open economies—the middle powers of the global market—are consistently being told that the choice between American and Chinese technology is inevitable and that the eventual decision will be obvious–at least for US allies. Popular commentary in the media frequently suggests that two separate technological ecosystems are under construction and that third parties cannot possibly be part of both.

If the world is indeed bifurcating along China and US-centered technological centers, Canada is unlikely to remain neutral. Nevertheless, before throwing our hands up and concluding this to be an inevitability, we should be aware that scientists, engineers, and firms from across the advanced industrialized world  (including China) continue to accelerate their participation in global technological standard-setting efforts and seek foreign partnerships. Moreover, few businesses, in Canada or elsewhere in the Western world, are decoupling of their own volition. In the face of political discord between China and its trading partners in the West, in the face of US entity list designations and diplomatic efforts to restrict business with Chinese firms, trade and investment with China is showing few signs of slowing down.

This is far from surprising. Technological have-not countries, which do not have large firms that can set global standards and influence the structure of global supply chains, are unlikely to be able to afford to implement two sets of global technology standards which will become necessary in order to do business with both China and the US. However, global technology leaders—countries like Germany, Japan, and Korea—can and likely will. This means that Canada, and countries like Canada, will have the most at stake in keeping technological globalization alive. Simply put, shrinking the potential market share for Canada’s technology is bad for national security.

When it comes to industrial policy, leaders in R&D and technologies that will be relevant in the not-so-distant future, like semiconductors and ICT, will be looking to position themselves in the most relevant way to ensure that their investments in today’s global standards and technological advances do not go to waste. Even if global technology standards bifurcate, we can be sure that firms that participated in setting standards for today’s ICT technologies will continue to see revenues flowing back into their R&D departments through licensing fees and hardware sales. After all, no new technology is built from scratch, but rather exists as an improvement on existing platforms.

The Way Forward?

Given the depth and complexity of S&T networks created by globalization, what is the realistic path forward for Canadian policymakers, firms, and scientific institutions? Can we reconcile the salience of national security vulnerability with the pressing need to protect the gains from globally dispersed R&D?

While we may be far away from resolving this dilemma, a fitting place to start would be at home. The Canadian technology landscape needs to return to the levels of R&D intensity that existed in past decades. Canadian firms also need help from policymakers in scaling their technology and ensuring that they can gain a greater share of next generation innovations to which Canadian R&D has contributed. Rather than stymying Chinese technology investments in Canada and collaboration with Chinese researchers, policymakers need to ensure that existing institutional and commercial arrangements contribute to making Canadian technology firms bigger and more globally competitive.

Canada’s sense of insecurity when it comes to Sino-Canadian technology collaboration comes from the fact that Canadian firms are no longer competitive in national security-technologies, which are the most relevant ICT technologies and define an increasingly digitized global economy. Nortel, once dominant in this sphere, no longer exists and Blackberry is a shell of its former self. This is precisely why Canada is especially sensitive to the emerging US-China technology war. Unless Canada can regain its erstwhile leadership in ICT, no amount of decoupling will change this vulnerability.

Anton Malkin, Assistant Professor, Chinese University of Hong Kong, Shenzhen

Panel 4: Pathways to Manage Non-Proliferation in the Middle East (4:30 PM - 5:45 PM ET)

The Western powers have failed to effectively manage the increasing threat of proliferation in the Middle East. While the international community is concerned with Iran’s nuclear program, Saudi Arabia has moved forward with developing its own nuclear program, and independent studies show that Israel has longed possessed dozens of nuclear warheads. The former is a member of the treaty on the Non-Proliferation of Nuclear Weapons (NPT), while the latter has refused to sign the international agreement. 

On Middle East policy, the Biden campaign had staunchly criticized the Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal and it has begun re-engaging Iran on the nuclear dossier since assuming office in January 2021. However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East. 

This panel will discuss how Western powers and multilateral institutions, such as the IAEA, can play a more effective role in managing non-proliferation efforts in the Middle East.  

Panelists:

Peggy Mason: Canada’s former Ambassador to the UN for Disarmament

Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)

Ali Vaez: Iran Project Director, International Crisis Group

Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast

David Albright: Founder and President of the Institute for Science and International Security

 

Closing (5:45 PM – 6:00 PM ET)

Panel 3: Trade and Business Diplomacy in the Middle East (3:00 PM - 4:15 PM ET)

What is the current economic landscape in the Middle East? While global foreign direct investment is expected to fall drastically in the post-COVID era, the World Bank reported a 5% contraction in the economic output of the Middle East and North African (MENA) countries in 2020 due to the pandemic. While oil prices are expected to rebound with normalization in demand, political instability, regional and geopolitical tensions, domestic corruption, and a volatile regulatory and legal environment all threaten economic recovery in the Middle East. What is the prospect for economic growth and development in the region post-pandemic, and how could MENA nations promote sustainable growth and regional trade moving forward?

At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic.

This panel will investigate the trade and investment opportunities in the Middle East, discuss how facilitating economic engagement with the region can benefit Canadian and American national interests, and explore relevant policy prescriptions.

Panelists:

Hon. Sergio Marchi: Canada’s Former Minister of International Trade

Scott Jolliffe: Chairperson, Canada Arab Business Council

Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar

Nizar Ghanem: Director of Research and Co-founder at Triangle

Nicki Siamaki: Researcher at Control Risks

Panel 2: Arms Race and Terrorism in the Middle East (12:00 PM - 1:15 PM ET)

The Middle East continues to grapple with violence and instability, particularly in Yemen, Syria and Iraq. Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel. 

On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region. This panel will primarily discuss the implications of the ongoing arms race in the region and the role of Western powers and multilateral organizations in facilitating trust-building security arrangements among regional stakeholders to limit the proliferation of arms across the Middle East.

 

Panelists:

Luciano Zaccara: Assistant Professor, Qatar University

Dania Thafer: Executive Director, Gulf International Forum

Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University

Barbara Slavin: Director of Iran Initiative, Atlantic Council

Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters

Panel 1: Future of Diplomacy and Engagement in the Middle East (10:30 AM-11:45 AM ET)

The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table. From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges. 

In this evolving landscape, Western powers will be compelled to redefine their strategic priorities and adjust their policies with the new realities in the region. In this panel, we will discuss how the West, including the United States and its allies, can utilize multilateral diplomacy with its adversaries to prevent military escalation in the region. Most importantly, the panel will discuss if a multilateral security dialogue in the Persian Gulf region, proposed by some regional actors, can help reduce tensions among regional foes and produce sustainable peace and development for the region. 

Panelists:

Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University

Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft

Ebtesam Al-Ketbi: President, Emirates Policy Centre​

Jon Allen: Canada’s Former Ambassador to Israel

Elizabeth Hagedorn: Washington correspondent for Al-Monitor

Panel 4: Humanitarian Diplomacy: An Underused Foreign Policy Tool in the Middle East (4:30 PM - 5:30 PM ET)

Military interventions, political and economic instabilities, and civil unrest in the Middle East have led to a global refugee crisis with an increasing wave of refugees and asylum seekers to Europe and Canada. Moreover, the COVID-19 pandemic has, in myriad ways, exacerbated and contributed to the ongoing security threats and destabilization of the region.

While these challenges pose serious risks to Canadian security, Ottawa will also have the opportunity to limit such risks and prevent a spillover effect vis-à-vis effective humanitarian initiatives in the region. In this panel, we will primarily investigate Canada’s Middle East Strategy’s degree of success in providing humanitarian aid to the region. Secondly, the panel will discuss what programs and initiatives Canada can introduce to further build on the renewed strategy. and more specifically, how Canada can utilize its policy instruments to more effectively deal with the increasing influx of refugees from the Middle East. 

 

Panelists:

Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto

Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada

Amir Barmaki: Former Head of UN OCHA in Iran

Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross

Panel 3: A Review of Canada’s Middle East Engagement and Defense Strategy (3:00 PM - 4:15 PM ET)

In 2016, Canada launched an ambitious five-year “Middle East Engagement Strategy” (2016-2021), committing to investing CA$3.5 billion over five years to help establish the necessary conditions for security and stability, alleviate human suffering and enable stabilization programs in the region. In the latest development, during the meeting of the Global Coalition against ISIS, Minister of Foreign Affairs Marc Garneau announced more than $43.6 million in Peace and Stabilization Operations Program funding for 11 projects in Syria and Iraq.

With Canada’s Middle East Engagement Strategy expiring this year, it is time to examine and evaluate this massive investment in the Middle East region in the past five years. More importantly, the panel will discuss a principled and strategic roadmap for the future of Canada’s short-term and long-term engagement in the Middle East.

Panelists:

Ferry de Kerckhove: Canada’s Former Ambassador to Egypt

Dennis Horak: Canada’s Former Ambassador to Saudi Arabia

Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)

David Dewitt: University Professor Emeritus, York University

Panel 2: The Great Power Competition in the Middle East (12:00 PM - 1:15 PM ET)

While the United States continues to pull back from certain regional conflicts, reflected by the Biden administration’s decision to halt American backing for Saudi Arabia’s intervention in Yemen and the expected withdrawal from Afghanistan, US troops continue to be stationed across the region. Meanwhile, Russia and China have significantly maintained and even expanded their regional activities. On one hand, the Kremlin has maintained its military presence in Syria, and on the other hand, China has signed an unprecedented 25-year strategic agreement with Iran.

As the global power structure continues to shift, it is essential to analyze the future of the US regional presence under the Biden administration, explore the emerging global rivalry with Russia and China, and at last, investigate the implications of such competition for peace and security in the Middle East.

Panelists:

Dmitri Trenin: Director of Carnegie Moscow Center

Joost R. Hiltermann: Director of MENA Programme, International Crisis Group

Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge

Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center

Kelley Vlahos: Senior Advisor, Quincy Institute

Panel 1: A New Middle East Security Architecture in the Making (10:30 AM -11:45 AM ET)

The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.

With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence.

 

Panelists:

Sanam Vakil: Deputy Director of MENA Programme at Chatham House

Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University

Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran

Abdulaziz Sagar: Chairman, Gulf Research Center

Andrew Parasiliti: President, Al-Monitor