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Harper in China. Jean qui rit, Jean qui pleure.

Montréal, 15 février 2012

Post WW2, Canada was allowed to join the G7 alliance as a country with strategic reserves that should be kept out of the orbit of communist influence, and kept in as a close ally.   In a single stroke, Harper in China has just rewritten this equation.  Interestingly, there was little murmur in the international press.  The lack of response is a clear indication that the main theater of actions, actions deemed desirable or undesirable, is shifting to Asia.  This is where we will expect rumbles and grumbles about trade, military tension and political collisions to happen.  Surely, Obama will bear regrets about his energy strategy.

Western provinces have thus confirmed China as a buyer of their oil and mineral riches.  Economic, demographic and political fortunes keep rising in western Canada, while they shrink in the Eastern part.  This mirrors the joys and miseries of the winners and losers in this new economic world order:  Higher prices for ores, lower prices for wares.

To quite an extent, but without the unfolding drama, Ontario and Quebec are facing a similar stretch as in Europe:  A worrisome pile of debt and diminishing growth prospect.   This points to some trouble ahead:  The consumer has stretched to the point where governments might now find it easier to cut and squeeze than grow and create jobs.

The real political acts in Canada will therefore not play out at the federal level for a while.  The conservatives have energy on their side.   It is at the provincial level that the critical political debates will roll on:  Roll up the sleeves, or roll back the state.

Andre Du Sault

Posted in Country visits, Strategy & globalisation, World economy.

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