Some B.C. businesses consider cutting ties with China amid political tension

From the imprisonment of Canadians Michael Kovrig and Michael Spavor in China, to Huawei CFO Meng Wanzhou being held in Canada, diplomatic ties between the two nations have been strained.

With that, some B.C. businesses are reconsidering their trans-pacific connections. Anita Huberman, president of the Surrey Board of Trade, says she’s heard from Surrey-based companies that are considering moving their business dealings out of China and into different Asian and European markets.

“There is hesitancy in doing business with China,” said Huberman. She believes the seemingly arbitrary detainment of the two Michaels, followed by their swift release once Meng was cleared to leave Canada, has left businesses questioning the moral values of China.

“Ethics and sustainable relationships with common values is very important to businesses today.”

From an economic standpoint, however, doing business with China makes sense. Hussain Khatheer is a Vancouver-based general contractor who purchases a portion of his building supplies out of China. He lauds the materials as high quality with a low price.

“Nobody has the manufacturing capabilities of China,” says Khatheer, general manager and co-founder of Vancouver General Contracting. “Nor do they have the ability to ensure and deliver the logistical aspect of things.”

Khatheer says there are other countries, for example, Vietnam and India, offering similar products, but China still has the best prices. Given the recent tensions around Meng and the two Michaels, Khatheer understands why businesses would want to cut ties with the country, but it’s a risk he isn’t willing to take.

“If I decide to not use China, I can’t guarantee my competition isn’t going to use them. Then, I lose all my business to my competition, because my prices are now 20 to 50 per cent greater than everyone else for the exact same product.”

“Certainly, it’s a decision that businesses need to take, in terms of bottom-line profitability,” said Huberman.

Trade talks between Canada and China fell apart in September 2020, as tensions around Meng’s detainment grew. Upon her release and the return of Kovrig and Spavor, Canada’s foreign minister said the country’s eyes are wide open when it comes to stabilizing the relationship.

Meanwhile, China denies any link between the imprisonment of the two Michaels and Meng’s extradition case. An example, Huberman says, of why some B.C. businesses are looking elsewhere.

“They’re thinking of alternative countries. Diversifying their relationships and not fully relying on China.”

Global shipping and supply issues brought on by the COVID-19 pandemic have caused the price of many goods to double, said Khatheer. In his opinion, many local businesses would be unable to eat the costs of boycotting affordable Chinese products and services.

“Ultimately, it would get passed down to the Canadian consumer.”