Economists worry growing conflict with China will make Canada and the world poorer

While far less significant than previous disputes with Beijing that in the past led to the long-term imprisonment of innocent Canadians and may have contributed to persistent trade sanctions, the latest Canada-China spat is only one sign of hostility between the world’s free-market democracies and what appears to be an emerging alternative bloc.

Just this week, China vowed retaliation against European sanctions on Chinese companies accused of aiding Russia’s war in Ukraine. Also this week, the U.S. government announced it had arrested Litang Liang, an American citizen accused of pointing out to China its friends and enemies within the United States.

“Even as we need more international co-operation on multiple fronts, we are facing the spectre of a new Cold War that could see the world fragment into rival economic blocs,” warned IMF boss Kristalina Georgieva earlier this year. “This would be a collective policy mistake that would leave everyone poorer and less secure.”