As whispers of Prime Minister Trudeau announcing relaxed terms for Chinese investments in Canada reach pundits’ ears, two commentators point out that the Asian economic superpower might not be interested in saving the day for the economy.
“Of course the government should aim to attract investment to Canada, including for oilsands development, but it shouldn’t be under any illusion that Chinese investment is the same as American or Norwegian or Dutch,” reads a Financial Post commentary jointly written by Brian Lee Crowley and Sean Speer of the Macdonald-Laurier Institute. “Ottawa would thus be wise to leave the current restrictions in place.”
Acknowledging that China is a source of major investment and trade and will likely become more significant as the Chinese middle class grows, the piece asserts that Canada should not exchange its national interests for “opulence”.
“Chinese SOEs are controlled and influenced by the Chinese government and are plainly agents of the Chinese state,” it says, citing government transgressions such as espionage against Canada and its corporations and illegal territorial expansions in the South China Sea. “Placing limits on Chinese SOE investment in key sectors that involve strategic or critical assets, such as the oilsands, as was done in 2012 was thus prudent and wise.”
The commentary also points out that China is not the only hope on which Canada’s fate is hinged. “Regulators are presently evaluating billions in proposed capital investments and there are promising developments in indigenous investment in oilsands projects,” it says. The Alberta Energy Regulator is reportedly anticipating $194 billion in oilsands capital investment between 2016 and 2025, and the outlook for foreign investment in Canada is good given the lack of decent returns in the global financial markets.
Essentially, the piece suggests that Ottawa has the right idea, but is wooing the wrong investors. “If there’s been difficulty deploying capital in the oilsands, it isn’t because the Chinese aren’t welcome, but because governments in Canada have driven off investment by Canadians and reputable international investors [because of restrictive regulations]. If Ottawa fixes these roadblocks, and there’s money to be made in oil, there will be lots of capital available with no national security risks attached.”
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