No need to rush into trade deal with China

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 evenhanded 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.

But experts doubt whether any deal with China would be all that open and whether we’d have an even-handed deal.”