Canadian Prime Minister Stephen Harper urged his Chinese counterpart to approve proposed investments by Manulife Financial Corp. and Bank of Nova Scotia as part of a broader effort to win greater access for Canadian companies in the Asian country.
Harper, on a trip to China, said he spoke to Chinese Premier Wen Jiabao yesterday about specific cases where Canadian investments weren’t being approved, without giving details. A person familiar with the talks said Harper cited investments by Manulife and Scotiabank.
“We have, I think, a pretty open regime when it comes to Chinese investment in Canada,” Harper said at the end of the first of his four-day visit to the country. “I’ve raised with the Chinese certain cases where we’re concerned about non-approval of existing investments by Canadians in China and that we expect to see even-handedness.”
Harper, traveling to China for the second time since 2009, is seeking to attract Chinese investment in Canada’s natural resources and sell more oil to Asia, while winning business for Canadian companies such as Manulife.
Carl Vallee, a spokesman for Harper, declined to comment on the specifics of the talks.
Bank of Guangzhou
Scotiabank, Canada’s third-largest bank, is seeking regulatory approval on the purchase of a 19.99 percent stake in the Bank of Guangzhou. The investment of about C$719 million ($723 million) would give the Toronto-based lender additional branches and deposits in China. When Scotiabank announced the purchase in September of last year, it said it expected to complete the transaction by December.
“We’ve been operating in China for 30 years and expect that this transaction will close in fiscal 2012,” Ann DeRabbie, a Scotiabank spokeswoman, said yesterday in an e-mailed statement. “We greatly appreciate the Prime Minister’s support.”
Manulife Chief Executive Officer Donald Guloien has said he expects business in China to eventually be as important as in the U.S., where the company owns Boston-based John Hancock Financial. Laurie Lupton, a Manulife spokeswoman, said it’s “normal course” for the Canadian government to raise such issues and that the company is “unaware of any problems.”
Canada and China yesterday also concluded talks on an investment-protection agreement. The two sides will perform a legal review of the deal before signing it, according to a statement from Harper’s office.
The pact includes an independent review process for disputes, Harper said yesterday. It “ensures non-discriminatory treatment in terms of national firms in application of the law and it also provides additional dispute settlement mechanisms in the event of difficulties,” he said. “This will make a very practical difference.”
After saying he hoped the deal would be signed as soon as possible, Wen called for discussions on a possible free trade agreement, the Xinhua News Agency reported. He said China is “ready to expand imports of energy and resource products from Canada” and boost cooperation in areas including renewable energy and the peaceful use of nuclear power, according to Xinhua.
Canada’s stock of direct investment in China was C$4.8 billion in 2010, less than 1 percent of the country’s total, and about one-third the level of investment by Chinese firms, Statistics Canada data show. With 99 percent of oil exports going to the U.S., Canada’s trade deficit with China was C$147.5 billion from 2006 to 2010, Industry Canada says.
At the same time, Chinese companies purchased more oil and gas assets in Canada from 2005 to 2011 than those any other country, according to Bloomberg Government.