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Lorne Gunter: Alberta must tread carefully while trading with China

Alberta Premier Danielle Smith may be excited that Carney’s MOU with Xi will yield the investors needed to build a new pipeline to the West Coast, but she should focus instead on the potential risks.

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During Prime Minister Mark Carney’s trip to Beijing in January, he signed a memorandum of understanding (MOU) with Chinese President Xi Jinping over energy. China agreed to buy more Canadian oil, natural gas and renewable energy, at the same time Canada will clear the way for Chinese investment in our energy sector.

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I have no objections to the former — the sale of energy — but I think major investment by Chinese companies (mainly state-owned) in our oil industry is dangerous.

The MOU Carney and Xi signed did not commit China to buying more Canadian energy (although so great is their need they will buy almost as much as we can ship them) nor does the MOU commit Canada to open its doors to investment by companies such as the Chinese National Overseas Oil Corporation (CNOOC).

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The MOU commits the two countries to a “ministerial dialogue.” It is more of an understanding to work on an agreement that might lead to a pact somewhere down the road.

Canadians are right to be offended by the impulsive ravings and unjustifiable actions of U.S. President Donald Trump. He and the Israelis may not currently be bombing our capital and defence bases, as they are Iran’s, still Trump has subjected us to trade broadsides that have harmed our economy as though we were an enemy state.

Carney is right to try to find other buyers for Canadian commodities, especially given that Trump is prone to waking up in the middle of the night, logging into social media and levelling some new punitive threat or reversing some concession he made the previous day.

For as long as Trump is president, our largest trading partner will also be one of our least-reliable.

But jumping feet-first into bed with the Chinese communists is not the answer.

Their central government is prone (like Trump) to impulsive behaviours such as seizing the assets of foreign companies and nationalizing them.

And whether or not they use slave labour in their energy sector, the Chinese still subject ethnic minorities (mostly Muslim minorities) — the Uyghurs, Kazakhs and Kyrgyz — to work as slave labourers.

Tibetans, too, are compelled to do forced labour.

Especially if Canada is entering into joint projects with China in the “green” energy field, we can expect part of any Chinese contributions to be the result of enslaved workers.

In 2012, the government of Stephen Harper approved the sale of Calgary’s Nexxen Resources to CNOOC, then immediately placed restrictions on future sales of Canadian companies to “foreign, state-owned entities.”

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Until Carney came along with his career-long love of China, Canadian governments have stuck faithfully to the Harper-era restrictions because the concerns of 2012 are still valid.

Chinese companies are a national security threat to Canada. They could “lock up” essential resources and insist we ship only to them, even over and above our own needs. Or they could compel us to keep supplying them, even if they attack sovereign democracies such as Taiwan and Japan.

Yes, the Americans are heavily involved, and they’re a foreign country, too, but their national interests (both before and after Trump) more closely align with ours and vice versa.

In many cases in the past, the Chinese have held joint ventures with western companies until their agents and computers have stolen enough trade secrets and technologies to run the companies on their own, then they have ended the joint ventures and run off with proprietary secrets.

And there is little chance that in return for us letting them invest in Canadian industry, Beijing will permit Canadian companies the same access to their market.

Alberta Premier Danielle Smith may be excited that Carney’s MOU with Xi will yield the investors needed to build a new pipeline to the West Coast, but she should focus instead on the potential risks.

lgunter@postmedia.com

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