Thank you, Chair and members of the committee.

Thank you for the opportunity to provide an update on Canada-China relations.

Today I will share some views about Canada-China relations, reflections on my recent visit to Beijing, and highlight important elements of our overall approach to China. Then I'll be very pleased to take your questions.

China has changed dramatically in the last 10 years, as has the rest of the world. China is both more assertive internationally and more authoritarian domestically. It “is looking to shape the international order into a more permissive environment for interests and values that increasingly depart from ours”, according to Canada's Indo-Pacific strategy.

The strategy describes China as increasingly disruptive, and in that sense, the country's impact is global. That's why we have to be pragmatic. China is a trading partner and a key player in many international challenges. Given its size and influence, we need to co‑operate in looking for solutions, as the strategy recognizes.

China remains a major force in a wide range of issues affecting Canada, from global problems such as climate change to bilateral trade issues.

To put it simply, China matters whether in terms of climate change, development finance, the global economy, or as Canada's second-largest bilateral trading partner. Responsible management of relations with China is crucial to ensuring Canadians' security and prosperity in the years to come.

Canada's Indo-Pacific strategy is clear that advancing Canada's interests requires meaningful engagement, and active and frank diplomacy with China. My visit to China in April was a cautious step forward in this process.

In Beijing, I had wide-ranging discussions with my Chinese counterpart over the course of several hours. We exchanged views on how we are to manage bilateral relations, including Canada's commercial interests. We discussed sensitive issues such as foreign interference, human rights and cross-strait stability. We shared perspectives on global issues such as the Middle East, the Russian invasion of Ukraine, and North Korea.

I found the exchange to be meaningful, with both sides seeking a way forward that would, at the same time, align with respective national interests. Not surprisingly, Canada and China have different world views. One of my goals was for the Chinese side to have a clearer understanding of Canadian priorities and perspectives. I believe that was achieved.

Much work remains for us as we chart a path forward. I'm mindful of what Minister Joly has said about pragmatic diplomacy. It is during challenging times that such channels of communication become so important. Canada cannot ignore China, nor would that be in our interests. We need to talk to one another so that we can solve problems together. I am confident that we are in a position to engage China with eyes wide open, and with clarity about the opportunities, risks and challenges.

Issues of foreign interference by the PRC are well documented by this committee and in the public domain, including the recent reports of the National Security and Intelligence Review Agency, NSIRA, and the National Security and Intelligence Committee of Parliamentarians, NSICOP.

We have emphasized to Chinese interlocutors on numerous occasions that there is no tolerance for foreign interference on Canadian soil. This message has been delivered by the Prime Minister, the Minister of Foreign Affairs, and by Canadian officials at all levels. I delivered the same message again during my recent visit.

Efforts by Global Affairs Canada to address foreign interference are part of a whole-of-government approach led by the Minister of Public Safety.

Other recent Government of Canada strategic initiatives have focused on critical minerals, foreign investment and research security.

We have also invested in China-focused capacity building across the Government of Canada. We recognize that our relationship with China is a long game and that investments made today will yield benefits over time for our organization, for Canada and for Canadians.

Co-operation with allies is also key to building resilience to China's increasing power and assertiveness. This co-operation is ongoing, particularly within the G7, as you saw in recent days at the G7 summit in Italy.

This committee will have heard recently—I believe it was on May 27—from stakeholders about the importance of Canada's exports to the Indo-Pacific, and more specifically China, particularly in the agricultural sector. The Government of Canada is engaged in ongoing efforts to support the diversification of Canada's trade with the entire Indo-Pacific region. Canadian agricultural companies continue to focus on the China market, not least because of the purchasing power of that market and competitive pricing. This focus is despite well-known risks. This is, of course, how our free market system works, with individual enterprises free to pursue opportunities as they see fit. Of course, the fact that China's energy and food security remain reliant on imports will continue to offer significant opportunities for Canadian businesses well into the future. Indeed the growth we have witnessed in Canadian exports to China over the past two years is a testament to this, as most of it has been in commodities such as iron ore and canola.

China remains Canada's second-largest bilateral trading partner and the third-largest merchandise export market after the U.S. and the EU, but it is important to put this into perspective. Canada's exports to China formed only 4% of our global exports in 2023. By comparison, we still export more to the state of New York. However, China also remains the second-largest economy by nominal GDP in the world. Its purchasing power remains attractive to companies that are looking for new markets, including in the clean-tech and life sciences sectors, and it continues to grow quickly. This is why direct engagement with China is imperative if we are to continue to support Canadian companies that remain committed to the market, while addressing the challenges that prevent new Canadian entrants that are interested in the market. Doing this requires a prudent approach, one that balances support for strong bilateral trading relations with efforts to protect Canada's overall economic interests.

As for where we go from here, we are focused on diplomacy. We are taking a patient and steady approach, with a clear-eyed view of what is important for Canada and Canadians.

I thank you for the opportunity to address you today on the state of Canada-China relations.

Thank you for your attention.