Canada PM says "very different" China system a Nexen concern

Fri Oct 12, 2012 12:06pm EDT
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By Joe Penney

DAKAR (Reuters) - Canadian Prime Minister Stephen Harper said on Friday that China's "very different" political and economic systems are a concern as his government decides whether to approve CNOOC Ltd's $15.1 billion bid for oil producer Nexen Inc.

The comments were some of the most revealing Harper has made in connection with the landmark CNOOC deal, which has raised fears over Chinese state-owned enterprises buying up Canadian energy assets.

Some members of Canada's governing Conservative Party are wary of the CNOOC bid, in part because of what they say are unfair Chinese business practices.

Harper - speaking to reporters in Dakar, Senegal - said Canada wants a growing relationship with China, but added that Chinese investments must be scrutinized from a national security perspective.

This week Ottawa hinted strongly that it would exclude Chinese telecommunication equipment giant Huawei Technologies Co Ltd from participating in the construction of a secure Canadian government communications network because of security risks.

Harper, asked about Huawei and the CNOOC takeover, began his answer by saying he would not comment on any particular transaction. But in his subsequent remarks he clearly touched upon both cases.

"The relationship with China is important. At the same time it's complex. It's complex because the Chinese obviously have very different systems than we do, economic and political systems, and that's why obviously some of these particular transactions raise concerns," he told reporters in Senegal.

The Conservatives need to balance concerns over security and an increased Chinese presence in Canada with their push to attract more foreign investment for the Canadian resource sector.   Continued...

Canada's Prime Minister Stephen Harper speaks to Canadian business officials in Dakar October 11, 2012. REUTERS/Joe Penney