One Belt, One Road for International Harmony

"SOEs form an integral part of China's national strategy for global expansion."
"That is a major reason why China has created monstrous SOEs through internal mergers in the first place."
Duanjie Chen, senior fellow, Macdonald-Laurier Institute

"[Canada is being too] sensitive [about Chinese capital flows into Canada. The national security review represents] looney [behaviour on the part of Canada]."
"We just hope the Canadian side could adopt the same standard for Chinese companies compared with other foreign companies [investing in Canada]."
"Chinese state-owned enterprises — they are not guilty. They have made great contributions to safeguard the welfare of the Chinese people. We feel it is really a pity that we couldn’t make such kind of good deal to happen."
"I think it will definitely send negative signals to the market, especially it will attack the confidence of the Chinese investors who want to invest in Canada."
"My first impression, to tell you the truth, [is] that I think the Canadian media or the Canadian public is too sensitive about the Aecon case because Aecon is just a construction company."
"From your side, you have your rules and regulations on the foreign companies overtaking Canadian companies. I think for the national security issue it is your internal affairs. The Chinese side does not want to interfere [with] it."Chinese Ambassador to Canada Lu Shaye

An Aecon Construction scissor lift operator. CANADIAN PRESS/AP, Tobin Grimshaw

If Canadian authorities react with more caution to Chinese investment in Canada than they would to investment by any other country, there is a good reason for it. China is an omnivorous predator, eager to gobble up wherever and whenever it can, sensitive proprietary technologies to benefit its own industries. It has created state-owned enterprises that act as independent corporations purportedly with no interest other than profit, and while the profit motive is writ large, so is the looting of industrial and governmental intellectual property.

The issue of the China Communications Construction Co., Ltd. financial holding division making a bid to the value of $1.5-billion to buy into Aecon Group Inc. has been fiercely resisted by the opposition in Parliament. Finally, Innovation, Science and Economic Development Minister Navdeep Bains announced Ottawa has committed to blocking the controversial sale. Canada, he stated, is "open to international investment that creates jobs and increases prosperity, but not at the expense of national security".

Ottawa announced a full national security review of the Aecon deal in February.  (David Kawai / THE CANADIAN PRESS)

Opposition Members of Parliament, business groups and domestic construction companies can all now breathe a sigh of relief that their criticism and warning that China would gain access to sensitive Canadian intellectual property and that local construction firms would become less competitive in future project bids, has borne fruit. The simple fact is, Aecon's contracts include the refurbishment and maintenance of nuclear facilities, along with the building and maintenance of sensitive telecommunications lines.

For Canada-China trade talks this represents an awkward juxtaposition of events, at a time when Justin Trudeau is anxious that under his watch an elusive free trade deal with China be gained, at a time when the North American Free Trade deal, encompassing Canadian, Mexican and American industry and trade is on shaky grounds with current revision of the NAFTA talks underway and faltering. On his recent disastrous Beijing trip, Trudeau made the mistake of demanding that China accede to his personal inclusion of social, environmental and gender stipulations.

Chinese authorities and negotiators were sufficiently taken aback to have pushed the Canada-China talks into some obscure cubicle from which it may never emerge, after recommending that Canada adhere to economic, trade-based discussions, rejecting the Trudeauian trade-talk stipulations. Coming hard on the heels of Trudeau's pathetic comic-impersonation shtick in India when similar free trade opportunities were bungled, it seems that Trudeau's inability to interact seriously with other leaders places him as a symbol of arrested juvenile development.

Permitting the Aecon sale to proceed would most certainly have impacted Canada's defence capabilities, and impact on its shared defence relations with the United States whose own sensitive intelligence and defence as well as intellectual properties would be affected. Not that the U.S. doesn't have ample examples on its own soil of American international conglomerates anxious to do business in China signing over delicate trade intelligence for the opportunity to invest in China.

As it is, American officials look with disfavour on Trudeau's approval of Canadian technology companies bought out by Chinese SOEs, as when Norsat International Inc. was acquired by the Chinese firm Hytera Communications Corp., Ltd., in view of the fact that Norsat had contracts with the U.S. Department of Defence, the U.S. Marine Corps, the U.S. Army, aircraft manufacturer Boeing, NATO, Ireland's Department of Defence along with others.

The approval by Trudeau of the takeover of ITF Technologies -- a fibre-laser technology company -- by Hong Kong-based O-Net Communications, reversed a decision by former Prime Minister Stephen Harper to block the deal. Aecon itself possesses contracts to install and maintain telecommunications lines with Bell Canada, with some of those lines traversing the Canada-U.S. border. "We do have shared infrastructure that needs to be looked at", commented Michael Wessell, commissioner of the U.S.-China Economic and Security Review Commission.

A worker passes in front of a truck displaying Aecon Group Inc. signage at a construction site in Toronto, Ontario, Canada, on Monday, Feb. 26, 2018. Photographer: Cole Burston/Bloomberg via Getty Images