A think tank is pushing back against the perception that Chinese firms are locking up Canadian resources, but rather are providing an important financial boost to the sector.
The Canadian Council of Chief Executives released the report on Tuesday entitled Behaviour of Chinese SOEs: Implications for Investment and Cooperation in Canada.
Chinese investment is “profit-driven to their core”, writes the study author Margaret Cornish, a former Canadian foreign service officer who is now based in Beijing as Chief Representative and Senior Advisor of Bennett Jones Commercial Consulting Inc.
She says Chinese investment is an important source of financing for many oil and gas firms.
However many Canadian are leery of Chinese motives. A recent Canadian Press-Harris Decima survey found that 71 per cent of Canadians disapprove of Chinese companies taking majority control of an existing Canadian-owned company. Forty-nine per cent were opposed to Chinese takeovers of foreign-owned companies operating in Canada.
Cornish says that Chinese SOEs operate much like their private sector counterparts in Canada and elsewhere – buying and selling oil and minerals on a regional basis to the highest bidder rather than automatically directing product to their home market.
The council says Canadians should be comforted that Chinese firms have to abide by the laws in Canada.
In the past two years, state-owned Chinese companies such as PetroChina, Sinopec and China National Petroleum Corp. have invested more than $10-billion in the Canadian oil and gas sector, bringing the total stock of Chinese foreign direct investment (FDI) in Canada to $14.1 billion. In December, the federal government approved Sinopec’s $2.2-billion bid for Calgary-based Daylight Energy, the first time a Chinese SOE has succeeded in a 100% takeover of a Canadian oil and gas producer.
The CCCE is a non-profit public policy group composed of Canadian CEOs.