There’s no security in Sinophobia

The Canadian government is currently conducting a national-security review of the proposed acquisition of the construction firm Aecon by CCCI, the foreign investment arm of a Chinese stateowned company. While we must always be vigilant in protecting our national security, the review should focus on what actual threats such a takeover might represent and whether blocking it would really be in the national interest. Much has been written on this subject that is both specious and fundamentally shortsighted.

What dangers do we hear from those opposed to the Aecon takeover? It is said that the company might work on the refurbishment of the nuclear plants in Darlington, Ont. or the building of military bases and, as an agent of China, it could use those contracts to plant sub-optimal components that would be programmed to fail, or conceal listening devices that would allow Chinese master spies to steal our secrets. Outside of a good spy novel, reality suggests that these are simply silly.

Canada sold two nuclear reactors to China in the 1990s along with all the intellectual property necessary to run and maintain them. AECL, a Canadian stateowned enterprise (now privatized), worked with Chinese state-owned enterprises to not only develop the most rigorous safety protocols of the global nuclear industry, but to advance the technology to make future systems more efficient and safer still. Other Canadian firms provided the control systems to the largest and most sensitive Chinese hydroelectric generating stations and essential technology for China’s high-speed railways.

Doing business in and with China made the Canadian companies stronger and more capable of competing on the international stage. The technology sharing did not aid an enemy intent on overcoming us economically. Nor did it create about whether we should tolerate Chinese state-owned companies, which are essentially under the thumb of the Chinese government, that we should tolerate Chinese companies buying into the Canadian market.” This indicates that the objection is to any Chinese firm, state-owned or otherwise, and is not sector specific or linked to a particular threat. In fact, it is vaguely reminiscent of Fadden’s unproven assertions of a decade ago that ministers of a number of provincial governments had been suborned into acting as agents of the Chinese Is it the fact that China is not a democracy that suggests we should a priori reject investments from Chinese firms? Preventing Canadian businesses from accessing Chinese capital, now a major part of global capital flows, would be somewhere between shortsighted and idiotic.

If there are specific national security threats posed by the takeover of Aecon by a Chinese state-owned company, the government should by all means identify them and determine whether those threats can be mitigated by conditions imposed on the firm. Conditions on foreign companies taking over Canadian firms are common, including ensuring there are independent Canadian directors sitting on the board, making board deliberations public, making financial records publicly available and committing to certain levels of local leadership and incremental financial investments.

There is no reason why special conditions could not be crafted to deal with sensitive contracts. Let us not be infected by imported antiChinese rhetoric, but instead recognize that China has become a major economic power, our second-largest trading partner and one of the most important sources of productive investment capital for our future growth and prosperity.