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Brian’s Blog

A Mouse between Two Gorillas

Over the years my blogs on macroeconomics have foreshadowed the show down between the US and China. Canada is now collateral damage and I don’t think anyone could see this coming. The conflict between our two countries is more about China projecting its image of power to its people, but what has come to the surface is the difference in the rule of law, of our nations.

Canada has detained Meng Wanzhou, CFO and daughter of the founder of Huawei, on a New York court ruling that invoked Canada’s extradition treaty with the US.  China has retaliated in response by simply capturing Canadians and using laws to express their displeasure. This is something that Hong Kong has been deathly afraid of and are now responding to with estimates of hundreds of thousands, or as high as over a million, people protesting in the streets.

I don’t think there are any real solutions to the China, US conflict. They are on a collision course. China wants to dominate the Asian world and its shipping routes, and become the next superpower. Their dictatorial political system and rule of law is in no way similar to the US and the US will not be willing to give up any of its power easily. The two may reach agreements from time to time but the underlying agendas of the two nations are at odds.

The US has chosen to use economic tactics instead of physical war and I think this is a trend that will continue. The wars in the Middle East have resulted in no clear winners and has cost the US dearly in both lives and support at home and abroad. Moving to economic warfare is still costly but probably a choice that will affect others more than the US. It also allows like-thinking nations to join, while pleading they had no choice against US sanctions. It is my belief that the world is mostly behind the US in its efforts to stem China’s ambitions.

China is not in the position to easily counter an economic war with the US but it has significant clout as the second largest economy in the world and a government that can change or bend the rules when it wants, to some degree. This brings us back to Canada.

Canada finds itself in the middle of a game of tug of war. It is the mouse trying not to get stomped on, caught in the ring of two battling gorillas. Canada is also having its own economic woes with its inability to share in the up and coming commodities boom that is looming just around the corner. As predicted, property prices are starting to fall, auto sales are looking bleak, and a US recession is somewhere in the future. Placed on top of all of this is a China that is less than impressed with a trading partner whose imports are second to only the US, and that our current dollar rally caused from good job news in Canada and poor job news in the US looks like it may be short lived.

International wars of imperatives aside, here at home we have recently seen how a lack of job opportunities can change the political trend in a hurry. With the conservatives back in power in Alberta, and with a majority, the focus will be on getting our petrochemical industry off the tracks and back into pipelines. However climate concerns are still real and environmental policies and the liberal government still rule the senate and the caucus as seen by its ability to push through Bill C-48. The country is more divided than ever and without some common goals to bind us this could be a long difficult period in Canada’s history. Quebec’s attempts at sending hydroelectric power to the US, hitting environmental road blocks would be laughable if it wasn’t so typical of our lack of solidarity and consensus thinking as Canadians. 

As an industry the NDT community needs more than ever to find that solidarity missing within our provincial politicians and come together to find ways to work around the difficult times we find ourselves in. Even if the world sees commodities come back as developed countries ignite the next boom, what role will Canada be able to play if we can’t get our products to market? If traditional products are disrupted, what will take their place? How will our industry respond? We have problems and questions that we need to solve and answer. Only by searching out the best resources and innovations will we be able to accomplish what Canada is known for worldwide: our productivity, innovation and abilities to work together with our partners to create a better world.

So remember…for the unknown there’s NDT, for NDT there’s IR.