Canada China Trade: Most Canadians Open To Chinese Investment, Worry About Losing Control

First Posted: 02/ 8/2012 11:45 pm Updated: 04/ 9/2012 5:12 am

BEIJING, China - A new poll suggests Canadians want China's help driving the economy, but don't want them in the driver's seat.

In the Canadian Press-Harris Decima survey, 51 per cent of Canadians polled welcomed Chinese investment when it helps fuel business that otherwise wouldn't get off the ground.

But the poll suggests Canadians are less enthused about the Chinese having a controlling stake in Canadian-owned or operated companies.

"The data shows that the historic thinking of foreign ownership being either desirable or undesirable is no longer valid," said Doug Anderson, senior vice-president of Harris-Decima.

"Opinion has evolved and Canadians now judge different types of foreign investment very differently."

Forty-nine per cent of those polled feel Chinese companies taking over an existing foreign-owned company operating in Canada is bad or very bad, while 71 per cent felt Chinese companies taking a majority controlling interest in an existing Canadian-owned operation is a bad thing.

Direct investment in Canada by China now stands at $14.1 billion a year, with the lion's share in the natural resources industries.

Since 2005, Chinese companies have been slowly buying pieces of Canada's oil and gas companies and projects.

Last month, PetroChina became the first Chinese company to have full ownership of an oilsands project, when it bought Athabasca Oil Sands Corporation's (TSX:ATH) remaining stake in the MacKay River project, one of the newest of northern Alberta's oilsands developments.

The survey of just over 1,000 people was carried out between Feb. 2 and 5 and has a margin of error of 3.1 per cent, 19 times out of 20.

The poll results were released as Prime Minister Stephen Harper tours China to promote Sino-Canadian relations.

In Beijing, Harper and Chinese leaders said the state of the relationship is improving.

Harper pointed to Canada's receipt of Approved Destination Status in 2009 and this week's conclusion of negotiations on an investment protection deal as prove that things are moving ahead.

"Our government is please with the progress achieved," Harper told reporters at the close of his first day in Beijing on Wednesday.

"We look forward to continuing to strengthen our strategic partnership with China while of course also maintaining a frank an respectful dialogue on the issues of human rights and the rule of law."

The poll suggests Canadians feel the Canada-China relationship has stayed the same under Harper, though among those who do feel relations have changed, the tendency is to feel they have changed for the better.

The overwhelming majority of Canadians — almost nine of out 10 surveyed — say the Canada-China relationship is important.

Harper was set to continue moving forward with relationship-building on Thursday, holding two bilateral meetings with Chinese leaders, including President Hu Jintao.

He spent the early part of the day touring the China-Canada Green Building Design Centre, which is the product of intensive lobbying on the part of Canada's lumber industry to encourage wood-frame construction in China.

Leonard Mao, the marketing director for Canada Wood, took Harper and his wife Laureen on a tour of a wood-framed building resembling a Whistler, B.C. ski chalet, which is used to train Chinese workers.

He noted that many Chinese "can't stand wood," but have also begun to desire building second homes and lumber makes an ideal material.

Canadian wood exports to China grew to $835 million in 2010, up 119 per cent from 2009.

During the first eleven months of 2011, wood products were Canada's third largest export to China.

Afterwards, the Harpers travelled into the centre of Beijing for lunch with Canada's newly-minted goodwill ambassador to China, Mark Rowswell, who is well-known in China as an entertainer by the name Dashan.

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  • Here are a few details of the major investment deal coming soon between Canada and China, as well as a list of what CBC chief political correspondent Terry Milewski calls a "small blizzard of incremental agreements," signed in Beijing. <em>With files from CBC</em>. (Diego Azubel-PoolGetty Images)

  • The Big One: FIPA

    Prime Minister Stephen Harper called the foreign investment promotion and protection agreement (FIPA) between Canada and China the first "comprehensive economic agreement" between the two countries. In fact, what was signed by Harper and Chinese Premier Wen Jaibao in Beijing is not the final deal, but a declaration of intent: Now it must be legally reviewed and ratified by both governments, which for Canada will mean a debate in the House of Commons. Once both countries complete this process, it will need to be formally signed to take effect. This deal will protect Canadians investing in China, as well as Chinese investors in Canada, from "discriminatory and arbitrary practices." Once in place, investors can have more confidence that rules will be enforced and valuable business deals will be subject to predictable legal practices. Harper told reporters in Beijing he "absolutely" expected that it will make a "practical difference." "The agreement does not override existing Canadian law in regard to foreign investment and foreign investment review," Harper said. "Those laws remain in place." Negotiations for this agreement took 18 years, and key players in manufacturing, mining and the financial sectors were consulted to get to this stage. It's not unusual for Canada to have this kind of an agreement with a trading partner. FIPAs are in force with 24 other countries that trade with Canada, and active negotiations are underway with 10 other countries, according to the government's announcement. (Diego Azubel-PoolGetty Images)

  • The 'Blizzard' (By Sector):

    (AP Photo/Valentina Petrova)

  • Agriculture

    - A new protocol, building on a 2010 agreement to restore Canada's market access to the Chinese market for Canadian beef following the 2003 BSE outbreak and resulting border closures, to allow industrial beef tallow (fat) to be imported for the first time in almost a decade. China used to be Canada's top export market for tallow ($31 million in 2002), and now Canada has a shot at a share of the $400 million in tallow China imports from around the world. - A memorandum of understanding (MOU) on canola research, to address a recent fungal disease in canola and rapeseed that threatens Canada's valuable trading relationship with China in canola. - On Tuesday, Chinese aquaculture feed company Tongwei announced it will increase its purchase of Canadian canola by up to $240 million per year by 2015. (DAVID BUSTON/AFP/Getty Images)

  • Natural Resources:

    - A MOU between Natural Resources Canada and the Chinese Academy of Sciences to collaborate on scientific research on sustainable development of natural resources. The government release touts benefits including new technologies for resource firms, carbon emissions reduction strategies, reduced environmental impacts and natural hazards from resource development, and new opportunities for Canadian suppliers of equipment and services. - A MOU spelling out a "framework" for Parks Canada and China's state forestry administration to collaborate and share scientific expertise in the management of national parks, natural reserves and other protected areas. The agreement includes language around ecological restoration, conservation measures for endangered wildlife, wetlands development, and the preservation of forests and wetlands. (<a href="http://www.flickr.com/photos/47096398@N08/" target="_hplink">Flickr: eleephotography</a>)

  • Energy

    - A continuation of the MOU, first signed in 2001 and renewed in 2006, on energy co-operation to "engage China on energy issues" through a Canada-China joint working group on energy co-operation, chaired by Natural Resources Canada and China's national energy administration, which is responsible for Chinese energy policy. The working group oversees joint research projects, exchange of expertise, and co-operation between energy companies in both countries, including the promotion of energy efficiency and renewables. It aims to both attract capital investment and improve market access for Canadian energy resources and technology. (MARK RALSTON/AFP/Getty Images)

  • Science and Technology

    - Approval of seven projects, valued at $10 million, under the Canada-China framework for co-operation on science and technology and innovation, including: a diagnostic kit for acute kidney injuries, a wind energy seawater desalination system, a waste heat-recovery system to help oil refineries consume less fuel, new solar cells for renewable energy panels, a real-time multi-sensor navigational tracking device for hand-held devices, a blue-green algae bloom warning system and "next generation" large-scale geographic information systems. - Two more calls for proposals, valued at $18 million ($9 million from each country) for joint research under the same framework. These proposals are for the development of "innovations with high commercial potential" in the areas of human vaccines and clean automotive transportation. The Canada-China joint committee on science and technology, made up of individuals from industry, academia and government, sets the priorities and oversees these projects. (To date, 21 projects ranging from nuclear power to AIDS drugs, to clean technologies for pulp and paper have received some $28 million in funding.) (TOSHIFUMI KITAMURA/AFP/Getty Images)

  • Education

    - A renewed MOU extending and modifying the Canada-China scholars' exchange program, which has seen 900 students travel between Canada and China since 1973. New eligibility rules and scholarships will be in place for the next round of competitions in 2012, including eight to 12 Canadian scholarships for Chinese professionals and 20 awards for Canadian university students. (<a href="http://www.flickr.com/photos/plutor/" target="_hplink">Flickr: Plutor</a>)

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