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Transcript of Chinese Embassador to Canada Lu Shaye's discussion with the editorial board of the Edmonton Journal

On October 26, 2017, Chinese Ambassador to Canada Lu Shaye paid a visit to the headquarters of the Edmonton Journal, where he met with and accepted an interview from Mr. Mark Lype, Editor-in-Chief of the paper and other editors and journalists. Mrs. Yang Xinyu, Minister-Counsellor of Chinese Embassy in Canada and some other diplomats from the embassy also attended the event.

Editorial board: Thank you very much Ambassador and I am honored you come and visit Edmonton Journal. We welcome having a frank and open discussion that's on the record. Is there anything that you'd like to start up with?

Lu Shaye: I am very glad to visit the headquarters of the Edmonton Journal. I would like to learn about your newspaper that plays an important role in Alberta, and hope to exchange views on a broad range of issues with you.

First, I would like to briefly introduce my purpose of visiting Edmonton. At the invitation of the University of Alberta, I am here to participate in a seminar on maritime security cooperation, which was co-organized by the university and the China's National Institute for South China Sea Studies. I delivered a speech on the seminar in the morning, mainly introducing China's foreign policy and diplomatic philosophy. We also communicated with the Confucius Institute affiliated to Edmonton Public School Board and visited some of their Confucius Classrooms. Through the exchanges, I feel that the government of Alberta and the municipal government of Edmonton have actively supported and attached great importance to the education of Chinese language in local schools as a bilingual education. Local students and parents have great passion in learning Chinese. This Confucius Institute also organized several groups of students to visit China annually. In addition to teaching the Chinese language, teachers at the Confucius Institutes also teach Chinese culture here. I think the Chinese language education and the running of the Confucius Institutes in Edmonton have made quite an achievement.

Certainly, the third purpose of my trip is to visit your headquarters. I hope that I can communicate with local news media of every province I visit. I gave an interview to your newspaper last time I came to Edmonton. This time, I am here at your headquarters for a deeper communication with you. And thank you for your friendly reception.

Editorial board: Mr. Ambassador, thank you very much for being here. We appreciate you to come in to speak with us. Obliviously there's favourable connection between the province now, Edmonton specifically, with China, not only on the business side, but also on the education side. Our first question is energy. Physically we have to start with energy. I've grown up in Alberta, being told that China is the market of the future for Alberta, and our energy. Lately I'm not so sure if that's true anymore. How much of the interest is there in China, receiving export from Alberta in terms of oil, natural gas? That sort of thing.

Lu Shaye: From the perspective of China, there are no difficulties at all in its cooperation with Canada, especially with Alberta in oil, natural gas and energy. As a great consumption power in the world with huge energy consumption demand, China has developed cooperation with many countries in such fields. When the international energy market was still in prosperity several years ago, China's three largest energy companies all carried out investments in Alberta. In recent years, influenced by the falling of international energy prices, profits of China's enterprises in Alberta have declined. Several large projects highly expected in Canada a few years ago encountered obstacles and difficulties this year, including the natural gas transmission project in the western area and the trans-mountain pipeline project of TransCanada Corporation. This has affected the confidence of China's energy enterprises to some extent. Therefore, the prospect of China-Canada energy cooperation greatly depends on whether qualified conditions are in place in Canada. The biggest problem for the trade of oil and natural gas in Alberta is its transport channels through which these resources can be transported to other regions. If this problem is solved, I believe Chinese companies will be willing to cooperate and offer support at any time. In a word, Chinese companies are very active in the cooperation with Canada in the long run.

Editorial board: Energy is just one of the things that Alberta export to China. We are large producers of wheat, canola and other grains, and beef and other meats. It's not always been easy for Canada to have access to markets. But I think now we have a very interesting next-door neighbour, Donald Trump, and the future of our free trade agreement with the US is very much up in the air. So what do you think might need to be done to improve trade relations between Canada and China, if we can't count on the United States to be our biggest market?

Lu Shaye: Both the Canadian government and business circle are talking about diversifying trade partners and shifting the focus to Asia and China. Given that the protectionism of Trump administration is on the rise and the trade relations between the US and Canada are in difficulties, I think it's at least a reflection or consideration of Canada, if not a decision. Because Canadians have realized that they cannot put all eggs in the US basket. The bilateral trade between Canada and the US has constituted 70 to 80 percent of Canadian foreign trade for a long time and therefore, Canada has been greatly subjected to the US market. That is why Canada gives such an importance to the renegotiation of NAFTA among the US, Canada and Mexico now. If NAFTA negotiation fails, I am afraid that Canadian trade will be severely impacted. However, in addition to the US market, there is still another big market, which is China. The volume of the Chinese market is now almost the same as that of the US. So why not switch to China? I think the earlier Canada makes determination to switch to China, the more benefits you will get. Now China and Canada are considering the negotiation of an FTA. We have reached a lot of agreements after four rounds of exploratory discussions and, of course, there are some differences. China advocates seeking common ground while reserving differences. In the areas of agreement, the two sides could have prior negotiation and achieve early harvest to benefit each other. In areas of disagreement, we can put away the issues for later discussion. Maybe after two to three years, the two sides will reach agreements when the conditions are ripe. Canadian canola, wheat and beef are in great demand in China. Last time I came to Alberta, some Chinese enterprises in Calgary told me they wanted to purchase beef from Alberta, but beef factories in Calgary were unwilling to sell their products to China because they had been controlled by American capital. Other local small and medium-sized beef companies were also unwilling to export their beef to China in that they wouldn't take a risk doing so while the system of exporting beef to the US market was mature and stable. Therefore, we believe it is necessary to better introduce and promote China and the Chinese market to some Canadian beef companies and farm owners. Fortunately, more and more Canadian people are now supporting Canada to sign the FTA with China. A recent poll by Canadian side shows that 69 percent of Canadian people are in favor of FTA, increasing 15 to 16 percentage points compared with May.

Editorial board: Wow, that's because of Donald Trump. Speaking of Trump abandoning the negotiations with NAFTA, in China they must see it as an opportunity to increase trade. Because of the NAFTA, it has kept us more closely tied with the US. They must be seen as a huge opportunity for China. I mean, is it about, but certainly to, perhaps move in. Correct?

Lu Shaye: Actually I do not think so. I personally think this would have little influence on China because Canada's market capacity is limited. With or without NAFTA, the export of Chinese products to Canada and Canadian products to China would not change too much. If the negotiation collapsed, I am afraid that the impact on Canada's exports to the US would be enormous; while as for the influence on China's exports to Canada, I cannot make a quantitative assessment at the moment. But no matter what happens, China will always regard Canada as an important trading partner. In order to provide opportunities for countries around the world to enter China's market, China is ready to hold the annual China International Import Expo in Shanghai from next year onwards. The aim of the Expo is not to promote Chinese products, but to enable different countries to sell their products in China. Canada will be our important guest country and we will invite Canada to participate both the National Exhibition and the Enterprise Exhibition.

Editorial board: Have the Expo begun already reaching out to the local companies, to ask them to come to participate?

Lu Shaye: We have just embarked upon doing this. The Expo will be held in November next year in Shanghai, We have almost one year to prepare for it. We will send invitations to countries around the world.

Editorial board: Other than resources like our energy resources and agriculture resources, what other areas are you looking at in the Canadian market?

Lu Shaye: After coming to Canada, I have visited some provinces and learned that Canada has plentiful advantages in technological innovation. It has a lot of small innovative companies, which have made some achievements in technology innovation. While due to the limited market in Canada, they do not have sufficient business opportunities. In this regard, Chinese enterprises are willing to cooperate with these small innovative enterprises in Canada, in that China has such a big market. In fact, this is complementary because Canadian enterprises can convert their innovative results into commercial profits and Chinese enterprises can also benefit from it. Let me give you a vivid example. Recently, Tencent, one of China's largest internet companies, has spent 40 million US Dollars for the acquisition of a Canadian network company (Note: refering to Wattpad-a Canadian online reading platform). The users of this company in the world were merely 60 million originally, which means nothing in China in terms of users' number. However, after the acquisition by Tencent, it will possess a Chinese market of 1.4 billion users. Of course, some Chinese companies have also acquired some so-called Canadian "high-tech" enterprises, causing the alertness and suspicion from some Canadian people. In fact, by acquiring those high-tech enterprises Chinese companies are getting them out of difficulties. When I first came here, I heard that the Trudeau government approved a purchasing case of a high-tech enterprise in Montreal by a Chinese enterprise which had once been rejected by the Harper government (refering to ITF purchased by O-Net Technologies). This issue stirred up a heated debate in the media. Back then, when the Chinese enterprise acquired this Canadian enterprise, the latter was about to go bankrupt, being cutting staff to only 130 jobs. After the acquisition by the Chinese enterprise, it regained vigor with the injection of capital. Now, this enterprise has managed to expand its business and the number of the staff has increased to 270. It is said that it's going to provide more than 300 jobs by the end of the year. Another Chinese company also acquired a Canadian enterprise specialized in auto parts in Ontario (Note: refering to the purchase of the Canadian company Meridian by Wanfeng Auto Group of China). The company almost went bankrupt as well. But two years after the acquisition, it began to gain profits, and now it pays over 10 million Canadian dollars as tax to local government annually. I just heard the news that a Chinese construction company is about to acquire a Canadian construction company (Note: refering to China Communication Construction's acquisition of Canada's AECON). Right after the acquisition news went out, the Canadian media asked us whether there should be a security review on this acquisition by a Chinese enterprise. I feel quite confused about this: how can a construction company endanger the safety of Canada?

Editorial board: Different topic: education. I know there are as you mentioned many relationships already. What more would China like to see in terms of relationships with education institutes in Alberta? Either primary school like Confucius institute or universities?

Lu Shaye: The first and strong impression I had on China-Canada relations was the education cooperation. Because the achievements made in this field is very extensive and remarkable. China has become the largest source country of international students in Canada with a total of 180,000 Chinese students. For example, there are 4,000 Chinese students at the University of Alberta. China-Canada education cooperation has played a significant role in enhancing understanding between the two peoples. Each Chinese student who comes to study in Canada can be a friendship messenger between China and Canada after a few years' learning here. But to be honest, the number of Canadian students studying in China is too small, which is fewer than 4,000. We encourage more Canadian students to study in China, and to know and gain an understanding of China. The Chinese side has been working on a project with Canada's U15, which is called "CLIC" (CANADIAN LEARNING INITIATIVE IN CHINA), and this is actually a project for Canadian students studying in China. We hope that we can encourage more first-class universities in Canada to send more excellent students to China through the above mentioned incentive measures. This is the second year that we started this project and this year, more than 400 Canadian students have gone to study in China, mainly for short-term internship with credits. There are also plenty of scientific research cooperation projects between China and Canada. In every university I visited here in Canada, the principals and teachers all told me that they are conducting scientific research cooperations with Chinese universities, always speaking the stories with great familiarity. China-Canada education cooperation is an encouraging and promising area of China-Canada cooperation, for it not only brings the exchanges of education between the two countries, but also is conducive to the cooperation in such area as tourism, sending a lot of Chinese tourists to Canada.

Editorial board: I want to ask about tourism. Alberta, of course, it's a big industry here. In the past I think Alberta thought that we didn't get enough Chinese tourists whether there were visa problems in China or visa problems in Ottawa. What do you think could be done to make it easier for people from China to visit and what do we need to do as Alberta to let more people in China know what a beautiful province we are.

Lu Shaye: The Canadian government, in hope of attracting Chinese tourists, should indeed provide more convenience, especially in visa facilitation. I've learned from some tourism enterprises in Canada that many Chinese tourists' journey to Canada was troubled by visa application, and a considerable portion of Chinese tourists could not get a visa to Canada. We, the Chinese Embassy in Canada, have brought this issue to the relevant Canadian departments. We hope the situation could be improved soon. And there's another issue that might hinder the development of Canada's tourism industry, which is Canada's incomplete tourism infrastructure. With the growth of the number of tourists, I think it is difficult for Canada's existing infrastructure to meet the needs of the large increase of Chinese tourists. Relevant problems include airport under-capacity, limited numbers of hotels and too-expensive accommodation fees. 2018 marks the China-Canada Year of Tourism. Attaching great importance to this theme year, the two governments are making relevant preparations. We hope that the whole Canadian society could pay more attention to tourism exchanges between both countries through co-hosting the Year of Tourism. We also welcome more Canadian tourists to visit China. To be honest, I've got the feeling after coming here that many Canadians hardly know China. They probably haven't been to China. Therefore, I hope they could travel to China to see its changes and learn about its status quo, which will possibly change their outdated impression on China. I've just mentioned the Canada's poll, in which a figure caught my attention, which shows that about 70 percent Canadians never care about or watch news about China.

Editorial board: Ambassador, you mentioned tourism and infrastructure. Can you expand on what industry here needs to improve to attract Chinese tourists?

Lu Shaye: Actually I am not in the position to provide suggestions for Canada. Things that are easy to implement in China may not be the same situation in Canada, such as building high-speed railways. To travel to Edmonton, I had to take one hour transit flight from Ottawa to Toronto first. If there were a high-speed rail between Ottawa and Toronto with an estimated length of little more than 400 kilometers at most, and with the speed of 350 kilometers per hour, it would only take me about one and a half hours to get to Toronto from Ottawa. It is fairly easy to build high-speed rails in China, as we now have total length of 22,000 kilometers of them, but I think it is probably difficult to do that in Canada. So again I am not in the right position to advise the Canadian side to build high-speed rails.

Editorial board: If it were built between Edmonton and Calgary, it would be great.

Lu Shaye: If you could build high-speed rails in Canada just as we do in China, I've already had several lines in my mind. For example, the one you mentioned between Calgary and Edmonton, the one between Toronto and Ottawa, and the one in the east between Montreal and Quebec City. Canada had once constructed the Canadian Pacific Railway, linking the west and the east. I think if there is a high-speed rail linking the west and the east, it will greatly promote Canada's economic and social development. In recent years, China has achieved great economic growth through building high-speed rails, which creates many economic opportunities and market demands, as well as changes people's ways of life. In the past, there was no high-speed trains, so many people chose to stay at home. Now we have them, and you can see lots of people travel to other places on holidays, which increases consumption in return.

Editorial board: We have lots of other questions but I know we are getting short of time. Next time then! Thank you very much for visiting us. This is a very interesting discussion.

Lu Shaye: Thank you very much for your reception and questions. By the way, could you introduce more about the Edmonton Journal?

Editorial board: Sure. We are the biggest paper in the city. And i think we are about the 5th largest paper in the country in terms of distribution. We cover everything through northern Alberta. Calgary has its newspaper and we are in Edmonton so we split the province. So the energy sector is very important, part of what we do, we'd like to cover, but we also cover trade and business, in relation to Alberta especially, and our connection with Ottawa of course and international relations through Ottawa of course and through the federal government. But I think the paper as a whole we cover the trade, and energy is a big part of trade from this part of the country. So it is important to us as a newspaper which is, I think why we sort of focused on that quite a bit at the beginning, especially.

Lu Shaye: How many employees do you have? And how many correspondents do you send to other parts of the country or overseas?

Editorial board: We are part of the Postmedia, which is the company that owns us, and which is a national organization. The company is headquartered in Toronto, and we have newspapers in all of the major cities in the country. So we have newspapers in Ottawa, Calgary, Vancouver, Montreal, and Toronto. So we have correspondents in all the cities. They have pulled back on international coverage in terms of reporters overseas. Our correspondent in Beijing came back a few years ago and we haven't had correspondent in China since then actually. We have someone based in Europe, and correspondent based in the US, but there's nobody actually in Asia anymore. When we had our correspondent in China, it was a huge benefit. I was working in Ottawa at the time and the correspondent in China would feed so many stories that obviously the connections were quite strong. The diaspora of Chinese population, of Chinese immigrants, or Chinese students, you mentioned there are 180,000 Chinese students to be able to serve (as the friendship messengers)…It would be benefit for us to have somebody there, especially now that China looks like it's going to be taking a much larger leadership role because of the American isolationism and American malaise. I think to hear your point that trying to enhance understanding between the two countries, the lack of coverage and not having correspondents overseas is a loss of opportunities. It hurts both countries not having reporting coming from Canadian reporters in China or vice versa, but certainly Canadian reporters in China explaining the stories back to Canadians. It's important.

Lu Shaye: With the China-Canada relationship becoming increasingly close, bilateral cooperation, in particular, has more connection with the life of ordinary people. Therefore, if the media could cover more news about the other side, it will certainly provide better services for its own people.

Editorial board: Absolutely.

Lu Shaye: I wish your newspaper a better future, and hope you can tell more good stories about China-Canada cooperation.

Editorial board: Of course. Thank you very much.

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