Green Light It?

State-owned China National Offshore Oil Company has made a friendly takeover offer of Calgary's Nexen Inc. in a move to get deeper into Alberta's oilpatch than is already the case.  For those Canadians anxious and nervous about China's involvement in natural resources world-wide, particularly in Africa, this is not good news. 

Canada is looking to diversify its trade, no longer as willing to regard the United States as its only options, although there is no question Canada-U.S. trade will always represent Canada's largest trading opportunity.

Canada, its government agencies and Canadians at large are weary of feeling like a step-sister when it comes to American consideration in its trade deals with Canada.  It always seems to us that we get the short end of the stick when dealing with the powerful trade opportunists that rule the American Congress, looking first and foremost to advantage America, treating Canada like the proverbial trade orphan. 

We are, in a very real sense, a captive trade audience; where else would our opportunities be as hugely reflected other than with our populous next-door neighbour? And where else in the world are we treated with less than respectful deference, but rather with an attitude of cavalier neglect.  Or is it just the plaintive complaints made by the losing end of a not-always equal partnership? 

Truth is, without the trade opportunities we've enjoyed up to now, even with the uncertainties and the unfairness of American protectionism, we've done pretty well for ourselves.  But it is time to look further afield, and the Conservative-led government of Canada has been doing just that, and fairly vigorously.

There's an incipient free trade deal with the European Union, which if the EU ever manages to pull itself out of its current euro-trials, may be good for our economic health, and theirs as well.  Our free trade deals with countries like Colombia come complete with perception problems, but the message is out there: Canada is open for trade.  We've registered our interest in joining the new Pacific free trade partnership, and have signalled willingness to meet the charges of agricultural subsidies to qualify.

And Prime Minister Harper has managed to curb his initial less than enthusiastic consideration of opening free trade with China, hungering for Canadian raw mineral products, of great appeal to this burgeoning economy of the most populous country in the world.  Foreign investments are appealing; the idea that the wealth of other countries' conglomerates will help us expand our own dreadfully costly development of resources has a certain resonance.

And the Chinese oil development corporation willing to ensure that they will keep operations in Canada, is prepared to help develop northern Alberta's oilsands, exactly what Canada is looking for.  The question is how much of our resources patrimony control are we prepared to share?  China's rapacious appetite for resource-based commodities is well enough known; its less than stellar human rights record has been cause in the past for Canada's government to hesitate in dealing with the energy-sucking giant.

"We intend to be a local company as much as a global one", said the chief executive Li Fanrong, of CNOOC about the Calgary initiative, reassuringly.  Of course this is a move that must have the agreement of Investment Canada and the Government of Canada and the Competition Bureau, as confirmed by Christian Paradis, Minister of Industry. 

The delegations that Prime Minister Harper and Alberta Premier Alison Redford led to China were meant to encourage just this kind of activity, and to assure the Government of China that Canada is open for business, and can be relied upon to supply it with the vast amounts of energy it consumes, from one of the world's largest oil deposits.  The purchase of Canada's 12th largest oil and gas producer by a Chinese state-owned company will look promising to some, appear a threat to others.

By law any foreign investments valued in excess of $330-million must undergo an assessment review process to determine whether the proposed deal will be of benefit to Canada on an industrial, employment and competitive level.  "From here, we will continue to manage Nexen's global operations, plus their existing operations for North and Central America.  This will result in a contribution of approximately $8-billion worth of their existing assets", assured Nexen's interim chief executive.

From here, the perspective of the average Canadian, it's a nervous-twitch-making proposition.  Most Canadians would most likely far prefer a greater share of Canadian industry and natural resources remain firmly in Canadian ownership.  "The reality is that the Chinese money is not that threatening.  I expect huge debates, but I would expect this to be approved and I think it should be approved", according to political scientist Wenran Jiang.

Beg to differ?