Canada’s new Indo-Pacific strategy calls for changes to foreign investment screening as a result of concerns about Chinese state-owned enterprises, a development that comes less than two weeks after Chinese President Xi Jinping (習近平) lectured Canadian Prime Minister Justin Trudeau on the sidelines of a G20 summit.
Trudeau’s government is revising the Investment Canada Act, a key law governing foreign investment, to add new provisions to protect the country’s infrastructure, resources, technology, supply chains and intellectual property, according to a strategy document released yesterday.
The document does not outline specific amendments to the law, but says Canada is to act “decisively when investments from state-owned enterprises and other foreign entities threaten our national security.”
It is part of a section on the country’s new approach toward China, which Trudeau’s government describes as an “increasingly disruptive global power” that disregards international rules and norms.
“We need to make sure we protect our national security, period,” Canadian Minister of Foreign Affairs Melanie Joly said during an interview in Montreal. “The goal of reopening this act is really to make sure that we have an approach that is much more transparent and that brings predictability.”
Canada has already moved to limit Chinese investment in some critical minerals, ordering Chinese firms to divest from three junior lithium explorers earlier this month.
Also this month, police arrested a former Hydro-Quebec employee and charged him with espionage for allegedly obtaining trade secrets for China. The man was a researcher on battery materials.
Chinese foreign direct investment in Canada reached C$21 billion (US$15.67 billion) last year while Canadian direct investments in China were above C$14 billion, according to Statistics Canada.
Joly, who characterized herself as pragmatic, said the business community should know the geopolitical risks of dealing with China.
“My job is to highlight that,” she said, adding that diplomacy comes with “what we stand for,” even if it might harden relationships.
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