Chinese investment critical, says institute director
Trillions needed to develop the industry can be hard to find in Canada, says China Institute director Gordon Houlden
Albertans were encouraged to remain open minded about Chinese investment in the energy industry at a forum held in downtown Calgary today.
The forum was hosted by the University of Alberta's China Institute, which did a survey last year that found 53 per cent of Albertans polled were opposed to state-owned Chinese investment in energy.
"China comes with a lot of baggage," says China Institute director Gordon Houlden.
The takeover of Nexen, formerly a Calgary-based oil and gas company, by Chinese state-owned entity CNOOC Ltd. sparked fierce debate over the role of state-owned companies in Canada's energy industry when it was approved in December 2012.
New rules for foreign takeovers were introduced when the deal was announced and Prime Minister Stephen Harper said at the time that companies should not expect to be allowed future significant takeovers of Canadian natural resource companies.
"When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments," said Harper said at a news conference in December.
Houlden says people often have outdated ideas about Chinese companies, but he says there is a financial reality to consider.
"There are 34 million Canadians — we are half a continent," said Houlden. "There is no way that we can generate the trillion dollars plus, in my view, of capital that we'll need to develop our resources."
He said Canadians should realize that Chinese companies want to fit in with domestic rules — but there might be a learning curve.
"They want to know the local rules," he says. "Don't assume, however, that they arrive knowing these."
The keynote speaker at the forum held at Calgary's Palliser Hotel was Daniel Rosen, who is an expert in U.S.-Chinese business and a former White House adviser.
He says there are legitimate concerns about Chinese companies, including their financial transparency, but that shouldn't be a reason to discourage investment.
"Now is the time to get broad-minded in thinking about where to go from here," he said.