A former Canadian spy chief wants his country to work with Australia, New Zealand and other "middle powers" to condemn and counter bad behaviour from Beijing.

Key points: Ottawa-Beijing relations have deteriorated after the arrest of the Huawei CFO Meng Wanzhou in Vancouver

Ottawa-Beijing relations have deteriorated after the arrest of the Huawei CFO Meng Wanzhou in Vancouver Two Canadians have since been detained in China and another had their prison term upgraded to the death penalty

Two Canadians have since been detained in China and another had their prison term upgraded to the death penalty Richard Fadden said Australia and Canada need a "modus operandi" to deal with China

Richard "Dick" Fadden served as national security advisor to former Canadian prime minister Stephen Harper, and before that was director of the Canadian Security Intelligence Service.

He said if America continues to become increasingly inward looking or unpredictable, "middle powers" need to have a considered plan for dealing with a more assertive China.

"Individually, I don't think we're going to have much success," he said in an interview with the ABC.

"If we have Canada, Australia, New Zealand, the United Kingdom, France and Germany saying 'this is not good', it could be roughly equivalent to the United States being part of the tune.

"The United States has been a very effective leader of the free world and Mr Trump does not seem inclined right now to play that role," he said.

The diplomatic relationship between Ottawa and Beijing has deteriorated rapidly in recent months following the arrest of Meng Wanzhou, the chief financial officer of tech giant Huawei.

Two Canadians have since been detained in China and another had a prison term upgraded to the death penalty for drug trafficking.

The cases were viewed widely in both countries as tit-for-tat retaliation.

A Vancouver court granted Meng Wanzhou bail on a $10 million bond. ( The Canadian Press via AP: Darryl Dyck )

Mr Fadden said he expected the saga to be a turning point in the way Canadians view President Xi Jinping's China.

"The general intuitive view, until quite recently, was that China was a good place, good people," he said.

"I think we've come to realise that China is not our enemy and it's certainly not that, [but] it's at least our adversary in a whole raft of ways.

"These events, I think, have made this crystal clear."

Australia 'feels more threatened by China'

For well over a decade, the Chinese Communist Party has increasingly tried to influence opinion in Australia, Canada and several other countries through a variety of methods.

But the issue has been given much more attention Down Under.

"The biggest difference is … Australia, I think, realistically feels more threatened by China," Mr Fadden said.

"You're closer, you're part of Asia."

He said Canada can "look with an objective view" at what has happened in Australia in recent years and respond to Chinese attempts to shape political opinion.

"In the case of China, we have to regard some of the relationships with us as being a threat," he said.

A new Cold War is 'unlikely'

Despite talk — particularly in the US — that the world could soon see another Cold War, Mr Fadden said that kind of escalation was unlikely.

"The Cold War had a particular characteristic where a given set of states really wanted to export the revolution," he said.

He said China does not want to take over other countries or export its political system, but instead would like to shift the international rules-based order in its favour.

"The success of Australia and Canada in dealing with China will be to work out a modus operandi," Mr Fadden said.