Canadian mining exports to China have eclipsed total exports to Germany.
EDMONTON—Canada’s ambassador to China says money from the Asian country is likely to keep pouring into Canadian resource projects.
But Guy Saint-Jacques also says he thinks those dollars will increasingly flow into mining and forestry as well as energy development.
“I expect that the interest will increase on the mining side,” he said in an interview. “What I expect also is maybe they will start to get interested in the forestry sector. There’s already investment in pulp manufacturing. I think they are starting to look at potential minority participation in a number of companies.”
Chinese state-owned companies have already staked out a significant foothold in Alberta’s oilpatch, especially in the oilsands after the federal government approved a $15-billion takeover of Calgary-based Nexen by China National Offshore Oil Corp. late last year. PetroChina has also expressed interest in owning a share of the proposed Northern Gateway, which would ship oilsands bitumen to waiting tankers on Canada’s West Coast.
The amount of Chinese money flowing into energy development is still three times the size of the amount going into mining. But Saint-Jacques, a fluent Mandarin speaker who was appointed ambassador last fall, said that country is looking at other resource opportunities as well.
A Chinese-controlled company now has a plan in front of northern regulators to build major open-pit lead, zinc and copper mines along Canada’s Arctic coast.
There is Chinese interest in northern Ontario’s Ring of Fire mining region and in Saskatchewan’s potash reserves as well, said Saint-Jacques.
Saint-Jacques says Canadian mining exports to China have already eclipse Canada’s entire exports to Germany.
Forestry exports are also increasing rapidly.
“Our wood exports to China have grown in spectacular fashion; in fact, 22 times between 2002 and 2012.”
The Chinese, who haven’t traditionally built homes from wood, are beginning to realize its advantages in terms of construction ease and insulation, Saint-Jacques said.
“There are new applications in terms of wood that are being specifically applied to the Chinese market, (such as) replacing the roof of a four- or five-storey building. If they use trusses they can replace a block in just a week, so it’s more efficient and they can also have better insulation.”
Chinese policy-makers are also getting a better sense of how Canada balances different interests in resource development, Saint-Jacques suggested.
“They have become a lot more sophisticated. In a number of cases they have started to have discussions directly with First Nations. I think they have come to understand what we mean by being good corporate citizens. They have refined their thinking.
“I have not perceived any expression of frustration or impatience so far.”
Still, the Chinese welcomed the Harper government’s decision to streamline environmental approvals for major developments, Saint-Jacques said.
The ambassador acknowledged trade irritants remain, especially around Canadian investment in China.
“We are still faced with investment restrictions in areas of Canadian strengths, such as mining,” he said. There are also concerns around the rule of law and lack of transparency for Canadian companies dealing in China.
Saint-Jacques said political reform is slow and unlikely to make any major strides forward in the near term as Chinese leadership changes.
He said he is “cautiously pessimistic” about the likelihood of liberalization in the country.
But he emphasized the two countries have to get to know each other better and noted that Chinese tourism to Canada is increasing so fast that embassy staff have a tough time keeping up with the paperwork. Up to half a million visitors a year could be coming from China by 2015, he said.