Canada may open to capital from SOE in China

Canada may consider relaxing its foreign investment rules, including steps to open up to State-owned enterprises in China, in a bid to attract more capital and spur economic growth, Canadian Finance Minister Bill Morneau said.

Morneau spoke to reporters on Sunday at a cabinet meeting ahead of the G20 leaders’ summit in Hangzhou, Zhejiang province, in early September.

He and Prime Minister Justin Trudeau will attend along with other senior Canadian officials.

We will express a continued interest in having a renewed relationship with China.” Canadian Finance Minister Bill Morneau

Asked about reviewing restrictions on the ability of State-owned enterprises such as those in China to acquire Canadian oil assets, Morneau did not rule out such changes. He said his government expects to discuss with Chinese counterparts how to spur more investment in Canada.

“We will express a continued interest in having a renewed relationship with China. In that regard, we’ll be talking about how we can work together,” Morneau said. “Those questions will be things that we’ll talk about, and our view will be that we’ll try and find ways that we can continue to encourage investment in our country.”

Then Prime Minister Stephen Harper approved the $15.1 billion sale of oil and gas company Nexen Inc to China’s Cnooc Ltd in 2012.

At the same time he introduced a measure that the government in the future would only allow a State-owned enterprise to acquire an oil sands company under “exceptional circumstances”.

Chen Fengying, a researcher on the global economy at the Chinese Academy of Social Sciences, said Canada is reviewing its relations with China amid the sluggish growth.

“On one side, China is a main customer of Canada’s oil products. On the other side, Canada is in urgent need of Chinese investment,” Chen said.