Tim Hortons, Canada Goose and other Canadian brands winning over Chinese consumers despite Huawei spat

Planting a Canadian flag on the streets of Shanghai seems like a cheeky bit of marketing these days, given the seemingly unending war of words between Ottawa and Beijing.

Yet here it is: the first Tim Hortons outpost in China. The maple leaf glows bright red, next to a hockey stick door handle and a sign promising "nice people" inside.

The greeting at the counter is "ni hao" (Mandarin) and the menu offers a nod to local tastes: green tea matcha doughnuts and salted egg Timbits. But the rest of this place is a blast of Canadiana unseen at any Tim's back home, including baristas dressed as lumberjacks and huge maple leaf quilts on the walls.

"It's like a Canada day in Shanghai," said local resident Han Zhang, who went to school in British Columbia. "Yeah, it works."

The man in charge of the Tim Hortons push into China agrees. All this unabashed Canadian branding – including the digital flames in the faux-fireplace at the back – aims to convey a warm and fuzzy feeling, said Yongchen Lu.

"It's about the values Canada delivers to the world," he said. "For example, the generosity, inclusiveness and community, which we believe are very relevant to Chinese people as well."

Not to mention the reputation for "wholesome food, beautiful mountains and clean rivers," said a customer nearby.

Despite all these good impressions of a country most people here only vaguely know, Canada has found itself in a double-double dose of trouble lately in China.

It's become notorious in state media for what's been called "hooliganism," because of its arrest of Huawei executive Meng Wanzhou at the request of Washington. Canada has been labelled "unfriendly" and a "lapdog" of the United States, and attacked for "rudeness" when it asserts itself diplomatically.

"Maybe this store is coming at the wrong time," said Tim's customer Alec Chan, as he sipped an extra-large coffee.

Why?

"Because Huawei is very important in Chinese people's hearts."

'Previous mistakes'

Indeed, when Chinese see the maple leaf these days, some see red.

At Chinese government briefings, Beijing has repeatedly scolded Ottawa, insisting it take "concrete measures to correct its previous mistakes."

In apparent retaliation for Meng's detention, Beijing arrested two Canadians on accusations of spying, holding them for almost six months. And Canadian imports – especially farm products – have suddenly faced punishing delays or bans at the border.

The Canada China Business Council said almost 20 per cent of its members have faced some kind of trouble working in China recently, almost always connected to the government. It's leaving Canadian companies "feeling helpless," said executive director Sarah Kutulakos.

"Business can tell it's being impacted, but it doesn't feel that it has the power to change the situation," she said. "The resolution of the situation is squarely in the hands of the two governments."

For all the official attacks on Canada and Canadians, the mood on the street is noticeably different. Individual Chinese citizens still seem to like the maple leaf, and Canada, as a brand, continues to draw a crowd.

Take Canada Goose, for instance. The Toronto-based coat-maker opened a huge store in Beijing's trendiest mall right in the middle of this dispute.

Instead of boycotts – as some countries' products have faced – the Canada Goose launch inspired excited posts on China's internet. The showroom was jammed, and so was the store's refrigerated room, which simulates Canadian winters for trying out jackets. People lined up outside, and some were told to go home empty-handed when everything was sold out at the end of opening day.

Strong pressure

Still, things do become unpredictable when any country faces China's wrath.

Two years ago, South Korean department store Lotte was ordered to close more than a hundred stores in a dispute between Beijing and Seoul over an American anti-ballistic missile system deployed in South Korea, which China considered a threat to its arsenal. A compromise was eventually reached, but the Lotte stores never reopened. Canadian businesses here haven't seen that kind of pressure yet.

Away from the current storm in Beijing, kindergarten kids play daily at the newest campus of the Canadian International School, in Shenyang. The chain of private academies flies the maple leaf flag outside and teaches the New Brunswick curriculum in its many classrooms.

Canadian staff and students here say they have not noticed any difference in how they're treated.

"The Chinese person across the street is still my friend," said school principal Alan Norman. "I don't feel any of that intimidation or angst or fear."

There's been "no feeling of danger" triggered "by the buzz that goes on at the government level."

That optimistic view was shared by many Chinese customers at the Shanghai Tim Hortons, even if the government wants you to believe that all of China is offended by Canada's diplomatic actions.

"We don't care much about this issue," said a man calling himself Mr. Chen, over a slice of pie. "I wish both countries would just get along and grow rich together."

That's the plan for Tim Hortons as well, said company president Alex Macedo in an interview. He sees "a big opportunity" as more people in China shift from tea to coffee.

Right now, the average Chinese person drinks only five cups of coffee a year, compared to more than three cups a day in Canada, based on research by business intelligence company Statista. The same research shows demand for roasted coffee beans is growing by 10 per cent a year in China.

Macedo said Tim's could open 1,500 new stores within the next decade in China (though competition from Starbucks and the new homegrown chain Luckin is fierce).

That is, if people spend more time drinking coffee, and Beijing and Ottawa somehow patch up their differences.