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HONG KONG — China’s incoming ambassador, saying Beijing still does not fully trust Canada, called on the federal government to roll back “negative” new foreign investment rules and smooth the way for increased trade with China.
Luo Zhaohui, a veteran diplomat with a love of basketball, will board a plane Thursday for Ottawa, where he will take charge of an international relationship that is as vital to Canada’s economic future as it is fraught with problems.
China has become banker to Canada’s oil and gas industry and buyer of its minerals and lumber, a country whose vast market and deep pockets have stoked lust among Canadian political and business leaders alike. Annual trade has reached nearly $60-billion (U.S.), although that’s “not enough” in the opinion of Mr. Luo, who held out the promise of a China open to buying more of what Canada has to sell.
But mutual suspicion has clouded the relationship even as ties between the two counties have deepened, with Canadian anxiety over the clout of the rising superpower and China bridling at trade and investment restrictions.
In an exclusive interview with The Globe and Mail Wednesday, Mr. Luo, 52, said the Canada-Chinese relationship, closer now than in the early days of the Stephen Harper administration, has “very good momentum” although it needs more “political engagement for mutual trust.”
He also warned that Beijing is critical of Canada for impeding investments by its state-run companies and for moving slowly to knock down trade barriers. Chinese companies looking to do business in Canada, he said, are chafing under excessive red tape.
Still Mr. Luo will land in Canada with a set of gift-wrapped trade gifts. China “will buy more” Bombardier jets. It “will encourage Chinese companies” to do more business with Canada, and is prepared to discuss “a maritime energy corridor” linking the two nations – assuming pipelines can get built to send oil west. On long-sought sales of blueberries to the mainland, he said, “that’s no problem.” And China is ready to buy more Canadian beef, too. “If the price in your country is reasonable, why can’t we import more?”
China is also preparing to meet long-standing Canadian requests for formal meetings between China’s new leadership and Prime Minister Harper. A bilateral meeting on the sidelines of the November Asia-Pacific Economic Cooperation summit in Beijing is being prepared, said Mr. Luo. And, he added, “I am quite optimistic for Chinese leadership to visit Canada” – perhaps in the near future, although he declined to offer any specifics.
At the same time, he warned that trust remains an issue between the two countries, and that Canada’s reticence to lower trade barriers is constricting trade flows. Mr. Luo specifically called out Canada’s new foreign investment rules, saying China’s state-owned giants “think that the new policy is not positive.” There is a desire, he added, that it “must have some kind of changes.”
While saying Canada is within its rights to write its own policies, he suggested it would be better to roll back the clock to the earlier rules, under which Ottawa approved the $15.1-billion takeover of Nexen Inc. by CNOOC Ltd.
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