Alas, Ottawa is getting further away from BC's investment interests.
BC's very own energy minister Bill Bennett was in China last week, visiting plants and talking to gigantic Chinese steel and energy firms. Bennett was very excited when he announced to the Chinese media through a telephone interview that the Chinese will be making at least one major investment in BC's mining industry within the next year.
He then added that there might be 2 or 3 deals soon as serious discussions between BC and Chinese firms are underway. There are several Chinese tours currently in BC exploring investment opportunities, another one will be here in Dec. Another 7 or 8 tours will be landing in BC in the next couple of months, Bennett said.
Bennett said Chinese firms are especially interested in BC's coal and copper mines.
See also a story by Miro Cernetig of the Vancouver Sun, who travelled with the premier last week and has maintained a very exciting Asia-China Relations blog. Here are a few remarks made by Gordon Campbell before he set sail to China:
"Frankly, the order of magnitude of our imagination is too small here."
"I say we're aiming too low," he said. "I say we should go bigger . . . The emergence of the Asian economies in the early 2000s is the same thing as the emergence of the European economies 50 years ago."
"We've got a lot of catching up to do. And we've got to act fast."
And here are a few suggestions by Gordon Chu, who advises the premier on the Asia Pacific Gateway initiatives.
One of the worrying factors is that the United States is actively seeking free trade agreements with other nations, particularly those on the Pacific Rim itself. Washington has signed a free trade agreement with Australia, for example, one of Canada's major competitors in most of its export markets. And the U.S. is moving toward more deals in the region. The most recent talks were with Vietnam.
"It is important to remember that Canada's advantageous access to the U.S. market will not last forever," warns Chu's report.
China, too, is following the same trend toward bilateral trade deals. And Canada, for the most part, isn't on Beijing's radar screen.
"Beijing is in discussion on possible FTAs with India, Chile, Singapore, South Africa and the Gulf Cooperation Council, and there is speculation on potential direct or indirect arrangements with Japan and South Korea," noted Chu's report.
"Interestingly, Canada does not appear on this list."
Here's the story from today's Globe and Mail, saying the Tories are thinking of barring Chinese investment in Canada's energy reserves.
Ottawa red flags foreign buyouts
The Conservative government is floating plans to block takeovers and investment from foreign state-owned firms should it detect a threat to Canada in the transaction, a move triggered by China's global prowl for acquisitions.
The policy emerged quietly this week in the new economic plan unveiled by Finance Minister Jim Flaherty.
Mr. Flaherty yesterday confirmed this concern about foreign-government firms, the same worry many Tories voiced from opposition benches in 2004 when state-owned China Minmetals Corp. made an unsuccessful bid to acquire Toronto mining firm Noranda Inc.
The Finance Minister's economic agenda says the Tory government sees a need to draw up rules for the rare event where a foreign investment poses a threat to Canada.
Related to this article
Experts say one prize Ottawa wants to protect is the lucrative Alberta oil sands, where Chinese state-owned companies have already made small inroads.
“There may be rare occasions where a particular foreign investment might damage Canada's long-term interests,” Advantage Canada, Mr. Flaherty's economic plan, says.
This policy surfaces after months of publicly souring relations between Beijing and the new Harper government and carries the risk of further alienating the two parties.
The Tory economic agenda — which otherwise aims to attract outside capital — raises red flags about those foreign state-owned firms that have murky structures and corporate objectives. It doesn't single out countries of concern or identify assets it wishes to protect.
“For example, foreign investment by large, state-owned enterprises with non-commercial objectives and unclear corporate governance and reporting may not be beneficial to Canadians,” the Flaherty economic plan says, adding Ottawa “needs a principle-based approach to address these situations.”
This initiative arises as Canada-China relations are in a rut.
Since it took office in February, Mr. Harper's government has reworked Canada's traditionally close relationship with China into a cooler and more distant one that sees the Tories taking a much more aggressive position on Beijing's human-rights record.
Last week, while in Asia, Mr. Harper criticized China for its human-rights policy and offered strong comments on the jailing of Canadian citizen Huseyin Celil in China. He said he would not sacrifice human rights on the altar of the “almighty dollar.”
Trade lawyer Lawrence Herman said China is clearly the chief country in mind in this investment-protection policy. He said it's hard to separate the initiative from the recent souring of the Sino-Canadian relationship. “I don't think you can untie the two,” he said.
Still, he thinks Canadian business would support the Tories if they blocked investment from foreign state-owned firms that could be shown to threaten domestic interests.
Greater Chinese inroads into the oil sands would certainly unnerve American policy makers, who always include Canada's tar-rich deposits in the equation when they discuss how the United States could achieve energy independence.
Mr. Herman, with Cassels Brock & Blackwell in Toronto, said he believes the Tories are particularly sensitive about what happens to the oil sands because of their Western Canadian base.
(At least two Chinese state-controlled companies, Sinopec Group and China National Offshore Oil Corp., have purchased small stakes in oil-sands interests.)
Canadian officials say China isn't the only concern. They say that Ottawa would pay equal attention to state-owned takeovers from Russia, Saudi Arabia, Iran or Venezuela, for instance, and that bids for other types of assets would draw the same close scrutiny.
The Tories say protecting “national interests” will be one of two goals in a review they're conducting of Ottawa's foreign investment rules, including the Investment Canada Act, which sets rules for screening takeover bids from outside the country.
The debate about foreign government-controlled firms buying vital assets has already played out more extensively in the United States.
A U.S. political backlash helped kill a 2005 bid by China National Offshore Oil Corp. to acquire Unocal Corp., a Houston-based U.S. oil and gas producer.
This spring, Dubai Ports World, a United Arab Emirates state-owned company, bowed to intense opposition from the U.S. Congress and abandoned its quest to run key American ports.
An expert in Chinese-Canada relations said any move to restrict investment will prompt discussions with Canada's provinces, which own the resources the Chinese or others might be interested in buying.
Yuen Pao Woo, president of the Asia-Pacific Foundation of Canada, said Ottawa and the provinces may have differing interests when it comes to investment from China.
Tags: china, canada, bc, gordon campbell, stephen harper, energy, oil, mining, investment, buyout
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