Nexen: China is not yet a country Canadian firms should partner with

David vs. David

Bottom line on top.  No beating around the "on-one-hand-on-the-other" bush.

Canada should reject the Nexen bid by the China National Offshore Oil Corporation (CNOOC).

In many regards, I now would be regarded as an "apologist" for Beijing. This was hardly the case earlier in my life.  At one point in my academic career, I was a serious student of Chinese history and politics. I read extensively on China's culture, literature, and history, examined its 1910 revolution and then studied and analyzed Mao-led China with its disastrous "Great Leap Forward" and "Cultural Revolution." The People's Republic of China (PRC) was one of the most brutal and murderous regimes ever known — tens of millions of Chinese died during the process in which Mao-suited "blue ants" imposed a tyranny in which human rights and freedoms were not a last choice; they were not even on the Chinese menu of choice.

But times have changed.  When Soviet communism collapsed in 1991, nobody would have predicted that 20 years later China would be an economic powerhouse challenging the United States in overall productivity, muscling militarily into the Pacific, and putting astronauts into space with national commitment to a moon landing.  Nor would they have predicted a social political system that is still "communism" but with variations and mitigations that have provided the "Old Hundred Names" average Chinese citizen with substantial personal liberties and economic opportunities.

[ David Kilgour: Canada shouldn't allow foreign control of businesses ]

This is an infinitely better China for global and regional military security.  But instead of accepting this China with all of its limitations, we have moved the goal posts.  We excoriate the harsh punishments accorded various dissidents (which scarcely appreciating that a generation ago they would have been killed out of hand).  We lambaste religious persecution (and perhaps selective "organ harvesting") of unpopular groups while forgetting that today's persecution gulags are almost trivial when compared to the Mao-era death camps.  We belabor Chinese shortcomings in environmental protection, rural poverty, and compulsory birth control without recalling  historical poverty and female infanticide.  We support self-determination for Tibet while ignoring that acceptance of Tibetan independence would be as rare as a Caucasian American willing to put to a referendum vote the return of the U.S. Southwest to Mexico.

In short, we seem to want a 1.3 billion-person Switzerland — but we are not going to get it.

The existential global problem is that we do not know how China fits into the 21st century global structure. Can we assume that a tribe of cannibals have adopted a vegan diet?  How much trust can we accord without appearing stupid naïfs?

We need to recall that historical Chinese maps depicted the country as the Middle Kingdom, in the center of every global map.  It is not interested in "silver" in the global Olympics — it seeks to dominate, not merely compete. The economic laws/regulations in China bow to justice, equity and protection of intellectual property, but the fate of non-Chinese investment in the PRC is parlous. Corruption is something that previous revolutionary/communists have rediscovered as a basic element of political action with the law applied politically rather than juridically.

Consequently, the degree to which the PRC is seeking political control over global natural resources should be a "wait a minute" national security question for Canada rather than an ideological debate over free market capitalism. Canadians should regard their natural resources as a national security issue — just as the United States did in 1987 when faced with a free-market sale of Fairchild Semiconductor to the Japanese.  The prospective loss of the high technology chip producer (which ultimately became Intel) was deemed too great a security risk.

Consequently, Canada should reject the Nexen bid by CNOOC; the temporary financial advantage is trivial compared with the prolonged risk of intrusive foreign control.

To be sure there are those who would support this argument, hoping that it would make it even harder to build a Northern Gateway (or any pipeline to the West Coast). Or assume with reflexive Anti-Americanism (sigh) that an Amcit is interested in U.S. control of Albertan oil. But ultimately there is no immediate need for this sale; oil is an ever more valuable resource and development investment is available from less chancy sources.