No need to rush into trade deal with China

Simcoe Reformer - Times-Reformer - - OPINION -

It looks like Prime Min­is­ter Justin Trudeau might not walk away from his visit to China this week with a deal to for­mally be­gin trade deal ne­go­ti­a­tions. And that should be just fine with Cana­di­ans.

While it’s odd for the PM to go abroad and not come home with a note­wor­thy win, a lot of ob­servers point out that Trudeau’s much-cov­eted prize — a trade deal with China — is fraught with peril.

A deal with Canada would be China’s first such bi­lat­eral deal with a G7 na­tion and the­o­ret­i­cally opens up a mas­sive mar­ket to Cana­dian com­pa­nies. But ex­perts doubt whether any deal with China would be all that open and whether we’d have an even-handed deal.

For starters, the Chi­nese econ­omy doesn’t op­er­ate like the Cana­dian econ­omy. De­spite signs in re­cent years that the Com­mu­nistruled coun­try is open­ing up, China is still con­trolled from the top and de­ci­sions re­flect China’s eco­nomic and po­lit­i­cal in­ter­ests.

The num­ber of Chi­nese state-owned en­ter­prises (SOEs) and the per­cent­age of the econ­omy they com­mand is far greater than that of Cana­dian Crown cor­po­ra­tions. Their SOEs ba­si­cally act as arms of the Chi­nese Com­mu­nist Party.

“It is the very essence of SOEs that they op­er­ate out­side a free mar­ket econ­omy rooted in pri­vate prop­erty rights,” Duan­jie Chen writes in a re­cent edi­tion of the Macdon­ald-Lau­rier In­sti­tute’s In­side Pol­icy mag­a­zine. “There­fore, one should not bol­ster the le­git­i­macy of SOEs by equat­ing them with pri­vate en­ter­prises.”

Back in 2013, Cana­di­ans saw Chi­nese state-owned CNOOC take over Cana­dian oil and gas com­pany Nexen with a $15-bil­lion pur­chase. We be­came cau­tious of SOEs back then and should not aban­don that cau­tion.

There are also am­ple se­cu­rity con­cerns as­so­ci­ated with do­ing busi­ness with China — rang­ing from the sale of Cana­dian com­pa­nies to China to Western politi­cians re­ceiv­ing do­na­tions from in­flu­en­tial Chi­nese busi­ness peo­ple.

Trudeau on Mon­day ap­peared at odds with Chi­nese Premier Li Ke­qiang over a num­ber of pro­gres­sive is­sues cham­pi­oned by our PM. Trudeau told re­porters he’s in no hurry to ink a deal.

For a PM who has in the past shown signs of too read­ily cozy­ing up to China, it’s a good sign Trudeau is now tak­ing his time. — Post­media Net­work

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