China's investment in oilsands a political migraine for Harper
The Alberta oilsands are seen in this file photo. (Jeff McIntosh / THE CANADIAN PRESS)
Published Friday, November 2, 2012 5:55PM EDT
There's understandable Canadian discomfort in watching China slowly but methodically gobbling up vast chunks of the Alberta oilsands.
The $18 billion it has already invested in various oilsand stakes will almost double in value if, and likely when, Prime Minister Stephen Harper approves the sale of Nexen Inc. to China's state-owned oil company CNOOC.
There's even more squeamish news with the same Chinese state-owned company hinting at buyer interest in Saskatchewan's potash industry. India apparently covets those mines as well.
For a prime minister scouring the planet for trade opportunities, this global interest in scooping up Canada's resources is a cursed blessing.
The overseas investment is needed to maximize extraction, but the only source of that much cash is a political migraine.
The optics of Harper on bended knee before Chinese investors on his last trade mission before signing a far-reaching investor protection treaty this week means he can't easily reject China's biggest Canadian buy.
But politically there's a growing Chinese backlash spreading across the country.
Unions are protesting the arrival of Chinese workers for China-owned coal mines in northeastern B.C., there are strong hints the government will ban China's technology giant Wah-Way from participating in buildings Canada's new super a secure cyber network, and despite various governments signing 30 investor protection deals around the world, only China's agreement unleashed an opposition screech for an emergency debate in the House of Commons.
Look, we are in a globally integrated economy where China wants to do more than to prop up troubled economies by buying their government bonds.
It wants assets to call its own and has the cash to pay a hefty premium on firesale prices.
The Harper headache is finding a way to impose purchasing conditions around a China which does not play fair or practice openness in its business dealings without appearing to single it out for excessively onerous scrutiny.
If we poke too many sticks at this red dragon, it'll spit fire in our direction and our economy will get severely burned.
That's the Last Word