The International Energy Agency (IEA) obliged its international member states recently by baldly asserting in a report that China’s formally communist public energy corporations operate on their own. Said the report’s co-author Julie Jiang in a release, “These are far from puppet companies operating under control of the Chinese government, as many have assumed. Their investments in recent years have been driven by a strong commercial interest, not the whim of the state.”
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This statement of opinion, allegedly, will help the Government of Canada allow government-owned Chinese energy companies to buy energy assets in Canada. Ottawa needs explicit assurances that these companies will make “commercial” decisions, rather than political ones, and, handily, a renowned think-tank has said they can.
“It’s an authoritative, international, Western-oriented agency,” said Wenran Jiang of the report in an interview, who holds a research chair at the University of Alberta’s China Institute. “If they [IEA] identify these trends, then it makes the life of bureaucrats in Ottawa so much easier” in dealing with Chinese acquisitions.”
This is surprising. The finding of the IEA is a sham platitude that we use about our own commercial crown corporations, and it is beside the point.
You don’t get to be appointed the CEO of a government corporation in France, Canada, Quebec, Ontario or China without already demonstrating exceptional political skill. You must have the ability to not need to be directed by the state in making business decisions that the state will find to its liking. Great bureaucracies everywhere aren’t led by “puppets” but by politicians—whether friends of a president or not.
It’s silly to expect politicians heading ministries or their agencies to be “commercial” during office hours and to play politics strictly on weekends.
The unacknowledged and obvious problem for Canada, however, is that the prospective corporate buyer is an emerging superpower. If it takes offence when our regulators assert a Canadian interest, it can cause us significant harm.
We have already chosen to have a lopsided relationship with our powerful neighbour by choosing to be independent. However, we have been political and military allies, and we trade with each other according to the rule of law.
Canada has no reassuring track record of respectfully disagreeing with the People’s Republic of China. Their bids for Canadian assets may be too good to resist. Tangible net benefits may be compelling. Nevertheless, it should be well considered in advance: once a piece of Canada is owned by the proud state of China, can it ever again be regulated as just another commercial enterprise?