Mark Carney, Prime Minister of Canada and a man with enormous economic, central banking, and financial policy experience, has been big news for the last week. Many nations are looking at him as a bellwether of geopolitical change. He has made no secret of his antipathy for Donald Trump and his southern neighbour’s commercial and foreign policies, and is committed to diversifying Canada’s international relations away from the United States.

It was no surprise, therefore, that the first Canadian leader to visit China for eight years was recently feted in Beijing. Then, via a trip to Qatar, he went to Davos where his speech, delivered on Tuesday to an audience steeped in politics, business and finance, received wide acclaim. For some it was even a template for what happens next in a global system that is fracturing amid rancour and fear.

There is a lot of substance in what Carney is saying. Yet, tucked away in all the cheerleading for change, which he is advocating, it is also worth noting rumblings in his rhetoric that are inappropriate, perhaps misguided, and possibly dangerous.

Carney said that the purpose of his visit to China was to develop a new strategic partnership that would lead to progress in areas of mutual interest. According to him, the areas include clean energy, climate competitiveness, trade in agriculture and food, Chinese involvement in Canada’s important auto sector, improved people-to-people ties, and support for multilateralism and good governance. A trade deal was also announced, providing for better access for Canadian canola and other products to China, and Chinese EVs to Canada.

There are no insuperable problems with any of these initiatives – not least with Trump pursuing his own trade deals with China – and, in any event, two-way Canada-China trade is a mere $120 billion, compared with $900 billion with the United States. The geography and gravity of trade and supply chains dictate the inevitability of such an imbalance, and Canada should try to find, where possible, and unless otherwise negated by national security and dependency concerns, opportunities to lessen it at the margin.

Yet there are problems for Canada, as there might also be for Keir Starmer in Great Britain, who is due to visit China later this month, and for German Chancellor Merz, who will travel to Beijing next month. China may be a more predictable trade partner than the United States right now, but it is not, as Carney asserted, a more reliable partner.

China ran up a trade surplus of $1.2 trillion in 2025, the equivalent of six per cent of GDP, and larger as a share of both its own and the world economy than the stunning surpluses achieved by Germany and Japan in their 1970s heyday. In short, China is the world’s biggest mercantilist power, featuring a dynamic industrial and export sector that is heavily subsidised, and stagnant imports because of economic policies that constrain consumption and boost production. Roughly balanced trade with both vibrant exports and imports is one thing, but state-directed mercantilist behaviour is both irresponsible and unreliable. Over 50 richer and middle-income nations have had to implement trade barriers against China in order to combat the threat of cheap Chinese exports to their own industries or industrialisation programmes. With the new Chinese five-year plan (2026-2030) due to be announced in March, and expected to double down on status quo policies, China-based trade tensions are only likely to escalate in years to come.

Doing non-contentious trade deals with China is fine, but political leaders who don’t consider the dangers of Chinese mercantilism and who think ‘US trade bad, China trade good’ are deluding themselves. If they also see China as a source of economic growth, which large surplus nations cannot be, they are also deluding their voters.

It would have been helpful if Carney had acknowledged this problem. Even the IMF is expected to do so in its forthcoming annual economic health check on China (a so-called Article IV report), following recent remarks that China’s trade surplus is not sustainable and that it would be better for the government to back away from its industrial policy emphasis.

It was also rather surprising for Carney to claim that the progress and partnership made with China ‘set us up well for the new world order’. Asked by a journalist what he meant by that, he referred to the rather dry matter of the architecture of trade governance, financial and payments regulation, digital trade, climate finance, and even the future of the global financial system and of the Renminbi. Carney expressed the view that these and other important areas, such as security, might in future be provided by different types of coalitions of nations, rather than international institutions as set up after the Second World War. That is indeed possible, but no one is under any illusion that  China – a totalitarian state that is a security threat, an organising force for other autocratic states, and a backstop for Russia’s war in Ukraine and Europe – would not endeavour to dominate such arrangements.

And so to Davos.

Carney’s speech to the last bastion of globalisation was powerful, and illuminating. He insisted that the world order had ruptured permanently, but that the so-called middle powers, like Canada, were not powerless. The parts of his speech that appealed to many perhaps came towards the end, where he set Canada up as an example of how ambition can help to adapt to the new, as yet largely undefined, order. He described how, in order to do this, Canada is trying to build economic resilience at home through macroeconomic and industrial policies, diversify its international relations, including with China, and build ‘variable geometry’ coalitions, issue by issue, with different partners. He insisted that middle powers must act together, and ‘live the truth’.

This phrasing is important and refers back to the opening part of his speech where he invoked the work of the famous Czech playwright, dissident, and later statesman, Václav Havel. In an essay written in 1978, The Power of the Powerless, Havel asked how the Communist system managed to sustain itself. It did so, partly through brute force, but, more powerfully, through the ubiquitous and coercive methods that were deployed to demand and acquire obedience and compliance from citizens, including those who were sceptics or opponents. This, Havel said, was ‘living the lie’, though he went on to explain that the flaw in this system was that it was an illusion, and people could shatter it, as indeed, they eventually came to do.

This was a powerful metaphor for Carney to cite. According to Carney’s telling, the parallel example to Havel’s shopkeepers, who passively followed the lie propagated by the Communist system, is or was the international rules-based order, which was set up after the Second World War. Carney maintained that this order, centred around a mostly benign American hegemony, was a fiction. The strongest nations would exempt themselves from rules when convenient, trade rules were enforced asymmetrically, and international law applied à la carte. Yet, the western world at least, as Carney said, ‘placed the sign in the window, participated in the rituals, and largely avoided calling out the gaps between rhetoric and reality’. Thus, the ideal of globalisation that was ‘sold’ as virtuous economic integration was also a lie, because that same integration is now being deployed as weapons: tariffs are used as leverage, financial infrastructure as coercion, and supply chains as exploitable vulnerabilities.

Most people will agree with Carney that the old order is dead, and that, while no one can know how the new one might look in a decade or two, it is important for countries to follow several of the paths that Canada is trying to tread, economically, commercially, and politically. They will also concede that it is a good idea for governments to find new mutually satisfactory arrangements that work, and live up to, the standards, values and beliefs that the participants profess to think important.

In this respect, then, how can Carney and many who applaud what he says regard his rejection and criticism of Trump’s America as inapplicable to Xi’s China, which gets plaudits for being part of a new strategic relationship?

Furthermore, the Havel parallel seems to be a bit of verbal theatre, one that may have had good intentions, but which, in its delivery, comes across as inappropriate, wrong and potentially dangerous. It conflates the coercion exercised, sometimes subtly, by the Communists in the USSR and Eastern Europe in Havel’s time with the idea that participation in the liberal rules-based international order was also a collective lie, involuntary and coerced. Nothing could be further from the truth.

If Carney’s speechwriters had read more of Havel’s essay, they would have found a spirited defence of democracy, the fundamental rights of citizens, and the rule of law, which no one had to be coerced into embracing. And so this part of Carney’s comparison was incorrect. Countries across the world signed up for these arrangements because they represented what many believed in and wanted. To be sure, the liberal order was also flawed. The United States exercised power through means fair and foul, and the rules of the order were often horses for courses. People and nations were certainly naive, and, in truth, hypocritical. But the world isn’t perfect and no one is born an angel. In spite of our beliefs and values, people and institutions fail to live up to expectations and let us down. Yet, coercion was not part of the system, and belief in the institutions and laws we value runs deep and is enduring.

All things considered, Carney has in important ways spoken for the world this week, or at least the bits that are not the United States and China. He has explained why Canada – and other middle powers – must build economic resilience, and diversify international relations, and still collaborate with like-minded nations, even if they should not do so in the old order’s weakened institutions, and must not hide behind hollow declarations of ‘strategic autonomy’ – or, as the Chinese government might say, self-reliance.

Yet there are glaring contradictions in what Carney said in Beijing and Davos. His new strategic partnership with China in the new world order is not going to go very far if Canada finds itself on the wrong side of the commercial leverage that China will seek to build over that country. The idea of China as a go-to partner for Canada, and others disillusioned by and distrustful of Trump’s America, will also bite back as China’s industrial and mercantilist and foreign policies erode aspirations to strengthen economic resilience and political independence.

The parallel between Havel’s moral argument for dissent under conditions of coercion in a totalitarian communist system makes for good oratory. But it offers a poor, and deeply misguided, illustration of our lives under the old liberal rules-based order, and cannot provide a guide for how we must now adapt. Personal and moral bravery in 1970s Czechoslovakia and Eastern Europe isn’t quite the same as trying to wrestle military, technocratic and economic statecraft back from an over-reliance on the United States, which we all thought was a good idea for over seven decades.