In his first three years as Canada’s leader, Prime Minister Harper had yet to visit China.
When Harper’s Conservatives formed a minority government in 2006, Chinese investment in Canada began to slowly decline. The term “strategic partnership” was no longer used by Harper to describe the Canada-China trading relationship. Major projects initiated by the previous Liberal government were set aside. Even cabinet level documents, such as the China Strategy, were shelved. Perhaps the decision that made the clearest statement was Harper’s decision not to attend the Beijing Olympics in the summer of 2008.
China-Canada political relations had cooled off.
Only a few years before, China-Canada relations seemed to be better than ever. During Prime Minister Paul Martin’s visit to Beijing in 2005, he signed a joint accord with President Hu Jintao on energy cooperation.
But after three years of putting China lower and lower on the list of priorities, in early December of 2009, Prime Minister Harper travelled to Beijing. So why did he change his tune in the final days of that calendar year?
Analysts have suggested the reasons behind PM Harper vying to strengthen bilateral relations are many. Criticism from the business and energy sectors was escalating, especially in light of the economic downturn. The recession certainly made reaching out to the Asian market more of a necessity. And, of course, the Conservatives’ China policy was becoming a liability and potentially could cost them votes in the upcoming election.
Whatever the combination of those reasons, Prime Minister Harper got on that plane with an aim to strengthen bilateral relations and by the time he returned, Canada-China relations were slowly edging back toward the path the 2005 accord had set out.
At the end of Harper’s four-day meeting, China’s granting of Approved Destination Status for Canada and a new Chinese Consulate General in Montreal were announced. His visit also resulted in agreements on climate change, mineral resources, culture and agricultural education.
With these bilateral commitments underway, Harper's visit successfully turned a new page in the history of China-Canada relations. The two countries’ political relations have warmed up — and so has business.
Major Chinese investments in Canada’s energy and natural resource sectors have increased exponentially since Harper’s visit in December of 2009.
One of our guests tonight, Wenran Jiang, wrote a report on this very subject for the Asia Pacific Foundation of Canada, entitled “The Dragon Returns: Canada in China’s Quest for Energy Security.” Below is his list of major Canada-China energy deals in the past two years, with a few recent additions:
Date: October 2011
Company: Daylight Energy
Purchaser & Joint Venture Partner: Sinopec
Price (US$): $2.2-billion
Why it’s significant: Dina O'Meara of Postmedia News reports that “the Daylight Energy and Sinopec deal also marks a move away from Alberta's vast bitumen deposits to unconventional natural gas, a resource China has yet to unlock commercially at home.”
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Date: May 2010
Company: Penn West Energy Trust
Purchaser & Joint Venture Partner: China Investment Corp.
Price (US$): $1.23 billion
Why it’s significant: The Globe and Mail’s Andrew Willis reports: “Chinese entities continue to increase their stake in one of the largest reserves of petroleum on the planet… When you look at the history of these deals, what becomes apparent is the increasing scale and ambition of investments by Chinese government-controlled entities.”
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Date: May 2010
Company: Syncrude
Purchaser & Joint Venture Partner: Sinopec
Price (US$): $4.65 billion
Why it’s significant: Analysts estimated the final agreement to be considerably less. Pavel Molchanov, an analyst with Raymond James, spoke with China Daily shortly after the deal. Molchanov said that "[the going price] reflects China's insatiable appetite for resource accumulation overseas, not to mention the fact that Beijing has a pretty big checkbook." Molchanov said he thought the stake would fetch about $4 billion.
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Date: March 2010
Company: Quadra Mining MOU
Purchaser & Joint Venture Partner: State Grid
Price (US$): $1 billion
Why it’s significant: An anonymous source told 680 News that this deal was a cut above, due to the fact that a copper consumer like China is more invested than “some financial flunkie.” The analyst also told 680 News that "it was a nice project on paper but how do you get it over the goal line? The project lending market remains closed so you can't go to a commercial bank so it has to be a key consumer of copper and that's still China," he said.
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Date: August 2009
Company: Athabasca Oil Sands Corp.
Purchaser & Joint Venture Partner: PetroChina
Price (US$): $1.7 billion
Why it’s significant: Geopolitics Central economist Vince Lauerman told the CBC that this deal was all about shifting energy geopolitics: "The Chinese, with their big wad of cash in their back pocket, are coming hunting…[They] want to diversify their sources of supply for energy security reasons and Canada has huge resources that they would like to gain greater access to."
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We've followed Canada’s role in China’s economic development on the Agenda in the past, from how the West should work with China:
And how the Middle Kingdom confronts economic downturn while dealing with the pressures of rapid progress:
Tonight we’ll discuss the implications of sustaining growth for the "world’s manufacturing workshop" and what China’s quest for energy security means for Canada.
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Photo credit: Government of Canada, E-Newsletter December 2009
