Canada at Economic War: Being Outplayed by Beijing

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The United States and its allies are being outplayed by Beijing. In failing to arrest China’s economic warfare against them, they have de facto subsidized their own downfall. Beijing’s economic attacks have shifted the balance of military power away from the United States. China has secured control over critical supply chain choke points, eroded Western industrial capacity, pre-positioned attack assets in Western systems and erased the technology gap on which deterrence depends. The United States has decided to fight back. Allies that provide defence assets secured against Beijing’s economic warfare will be powerful players in the new world order.

In this policy brief, the third within CIGI’s Canada at Economic War project, Raquel Garbers says Canada needs to make radical changes to defend itself. The wrong choices will see China aggress us, allies bypass us and the United States treat us as a dangerous liability to be forcefully managed.

As the world shifts toward a new and uncertain world order, Canada finds itself on the front lines, caught between rival superpowers in a 360-degree threat environment.

In this video, part of the Canada at Economic War project, Raquel Garbers provides insight on how globalization enabled hostile actors — China chief among them — to use illicit, unfair and illegal economic practices to corrupt the global order that has been essential for maintaining stable interstate relations.

In this paper, S. Yash Kalash explores the evolving relationship between geopolitical transformations and technological innovation, and their combined impact on the future of global financial assets and systems. Through a scenario-based methodology, he examines three plausible geopolitical configurations — a multipolar order, a fragmented global economy and a renewed cooperative global governance framework — and assesses their implications for currency stability, investment patterns and market volatility.

The analysis then integrates technological developments — particularly in artificial intelligence (AI), blockchain and decentralized finance — into each geopolitical scenario to evaluate how these technologies may amplify, stabilize or disrupt global financial systems. Drawing on current trends and foresight tools, the paper concludes with recommendations for strategic policy responses focused on regulatory flexibility, global coordination, infrastructure investment and cybersecurity.

The 2025 North Atlantic Treaty Organization (NATO) summit, which took place last week in The Hague, was unique in many ways. Many of NATO’s most prominent members have gone through political transitions in the past 12 months, and Mark Rutte led a summit for the first time since being named the organization’s new secretary general.

With elements such as the strengthening of NATO’s deterrence capabilities, increasing defence budgets, the ongoing support for Ukraine and recent events in the Middle East among the topics up for discussion, we asked CIGI experts and fellows: “In your opinion, what is the biggest strategic question that NATO leaders must answer in the 2025 summit?” Raquel Garbers, Branka Marijan, Paul Samson, Aaron Shull and Wesley Wark weighed in.

Announcing the Canadian AI Adoption Initiative

On June 26, CIGI, the Centre for the Study of Living Standards and the University of Waterloo announced a new initiative to advance AI adoption across all sectors in Canada: The Canadian AI Adoption Initiative (CAIAI).

“AI represents a historic opportunity to address the long-standing productivity crisis in Canada,” said Joel Blit and Danielle Goldfarb, co-directors of CAIAI. “This initiative aligns with a growing government focus on AI adoption and will provide policy makers advice on best practices and support in developing the metrics that track country-wide adoption.”

CAIAI brings together leading experts on AI adoption and public policy to provide recommendations to policy makers, including the federal government’s new minister of AI and digital innovation. The first AI adoption expert workshop was held on June 12, 2025.

Read more about the launch of CAIAI and its first set of recommendations.

“As India recalibrates its external posture in an increasingly fragmented world, the nation must ask itself: Can economic engagement with China serve national security objectives rather than compromise them? Amid renewed global trade tensions from Trump-era tariffs to post-pandemic protectionism, the idea of strengthening commercial ties with China may appear politically unpalatable. Yet, India’s two-front security dilemma demands fresh thinking. Military deterrence has not shifted the strategic axis between China and Pakistan. A complementary approach rooted in calibrated economic statecraft could prove more consequential.”

In this opinion, S. Yash Kalash argues that India must break free from a purely security-first China policy and instead weave selective, safeguarded trade into its strategic approach.

“The quantum revolution is gaining momentum. Already, quantum sensors and communication devices are changing how people manage and protect both digital and natural assets. On the horizon, quantum computers and simulators promise to unleash previously unimaginable capacities, directly implicating national security. These capacities manifest in two key ways: enabling new applications that solve computational problems and provide unique insight into material properties that classical computers cannot, and supercharging the capabilities of algorithms through enormous efficiency gains. The extent and direction of innovation in the quantum field will crucially depend on the industrial organization of this nascent sector.”

In this article, first published by Just Security as part of its Governing the Quantum Revolution series, Tracey Forrest and Nikolas Guggenberger write that to “harness quantum’s full potential, governments should create a market environment conducive to strategic innovation.”

The global proliferation of large language models is aggravating numerous security concerns. Among them is how AI may enable extremists to commit bioterrorism to advance their ideological causes. Chatbots have already proven capable of advising users on how to plan attacks using lethal new forms of bacteria, viruses and toxins. Great-power competition, meanwhile, is distracting from threats posed by terrorist groups and malicious non-state actors.”

In this opinion, Kyle Hiebert takes a look at where we are now with technological capability and the protections in place, or needed, surrounding bioterrorism.

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