Unclear investment rules are hampering trade between Canada and China, a study by officials from both countries said on Wednesday, just three weeks after CNOOC Ltd. offered $15.1 billion for Canada's Nexen Inc.
The bid from China's state-owned CNOOC—politically sensitive for Canada's Conservative government—is seen as a key test of whether Canada is open to foreign investment as it seeks both to tap foreign funds to develop the Alberta tarsands, and to sell oil to China and elsewhere in Asia.
The government study of the economic interests and requirements of both countries said "certain obstacles" limited the ability of China and Canada to reap the full benefits of trade and investment in natural resources.
"Canadian and Chinese stakeholders have highlighted the need for increased regulatory clarity, efficiency and predictability in the context of direct investments in each other's countries," said the report.
"Resolution of these obstacles will be essential to improving market access and facilitating two-way trade and investment in the natural resources sector."
Critics have long complained that the rules Canada uses to determine whether to approve foreign takeovers are too opaque and the process is too secretive. Ottawa says Canadian resource firms are being unfairly restricted in China. . .View Full Article