VANCOUVER - The onus is on China to show its state-run enterprises can be trusted to play by the same rules as Canada, Prime Minister Stephen Harper said Thursday.
Harper made the remark to a business audience as he prepares to meet Chinese President Hu Jintao at the 21-nation Asia-Pacific Economic Co-operation leaders' summit on the weekend in Vladivostok, Russia.
Harper was the headliner at Bloomberg's Canada-Asia Dialogue conference on a stopover to the APEC gathering on Russia's Pacific coast, not far from China and North Korea.
He was grilled in a question-and-answer session about Industry Canada's ongoing review of the China National Offshore Oil Corp.'s $15.1-billion deal to buy Calgary-based Nexen Inc. (TSX:NXY) during a session of top business leaders in Vancouver.
The event also served as a preview for a message Harper will likely send in the bilateral meeting he hopes to have with Hu in Russia, likely on Saturday.
Harper was pressed on how his government wants to deepen trade with a country that sparks suspicion because it might not play by the same rules as Canada.
"I can't quarrel with you. I know the polling data on this," Harper said.
"I think it's incumbent upon the Chinese to indicate, as the relationship goes forward, their willingness to play by the same rules."
Harper said he wants to deepen economic relations with China but that relationship must be a two-way street, or "win-win to use the Chinese expression."
He said Canada can conduct its relations respectfully, "but (is) not afraid to further our own interests and to raise our own concerns on things like human rights." He added that Canada has "important things that the Chinese want."
Harper was referring to China's voracious need for energy and natural resources to power its economic growth.
China has already invested heavily in Canada's natural resources sector, but that has sparked concern because its players are state-owned entities, not private companies.
The opposition NDP has pressed the federal government to reveal what criteria it is using to decide CNOOC's bid for Nexen.
The deal would have to be of net benefit to Canada, but the Tories haven't defined exactly what that means.
Harper was reluctant to elaborate Thursday saying it is a "complex test," and he didn't want to prejudice the outcome of the review.
"Our definition of net benefit will be very broad in terms of the overall interest of the Canadian economy, now and in the longer term," he said, without elaborating.
The Conservatives have rejected only two foreign takeovers in the last six years, most recently a US$40-billion bid by Anglo-Australian mining firm BHP Billiton for Potash Corp. (TSX:POT) in 2010.
The government has also made expanding trade and investment with Asian countries an economic priority for Canada as its traditional partners in the United States continue to struggle.
As Canada pursues opportunities with China, Harper said he understands the two countries have different economies and political systems, and that has to be accepted.
"We can't make it a prerequisite of doing business, that they've got to become just like us," he said.
"But we do have to accept that there are differences and factor in those differences in how we conduct our selves."
As Harper departed for APEC Thursday, the Asia Pacific Foundation of Canada issued a wide-ranging report that urged his government to develop a "comprehensive engagement that extends beyond a commercially focused, and bilateral-centered approach" with Asia.
"Ottawa has done a commendable job over the past three years to put Canada back on track with our engagement with Asia," said the report's co-author Don Campbell, a former deputy minister at the Foreign Affairs Department.
"The challenge now is for Canada to sustain and build on its foothold in Asia through a more coherent strategy that utilizes bilateral and regional processes. Currently, Canada is either not present or on the margins of some key institutions."
The report called on Canada to volunteer to host the 2017 APEC summit.
It also urged Canada to seek membership in the East Asian Summit, another emerging regional body that deals with peace and security.
However, in a recent interview with The Canadian Press, the foreign minister of Indonesia — a key player in the EAS — said Canada's entry to the club wasn't likely to happen any time soon.
"I don't think it's on the immediate horizon because we've just absorbed Russia and the United States last year so there is still a lot consolidation to be gone through before any other process," said Foreign Minister Marty Natalegawa.
"It's just a matter of getting things done. There is no shortcut to diplomacy in bilateral relations and regional relations."