This article originally appeared on the Dogwood Initiative blog.
With final arguments in the Kinder Morgan pipeline review underway in Burnaby, a top Chinese official is using the moment to offer Canadians a deal. During his visit to Ottawa last Friday, Han Jun, China’s Vice-Minister of Financial and Economic Affairs, said the world’s second-largest economy would be willing to sign a Free Trade Agreement with Canada — but only if we build a pipeline to the West Coast.
Signing an FTA, Han suggested, would give Canadian agriculture and energy producers greater access to China’s domestic market. In return, Beijing also wants restrictions lifted on takeovers of Canadian companies by Chinese state-owned enterprises (SOEs).
China has been working to gain access to Canadian oil reserves for more than a decade. As Enbridge’s first partner on Northern Gateway in 2005, state-owned PetroChina pledged to purchase up to half of the pipeline’s capacity, but became frustrated by delays and eventually pulled out of the project.
In the years following, China’s SOEs invested billions into the Canadian oil patch, culminating in the 2013 purchase of Nexen by the Chinese National Offshore Oil Corporation (CNOOC) for $15 billion. (In a tragic coincidence, hours after Han spoke in Ottawa, an explosion at Nexen’s Long Lake facility killed one worker and left another critically injured.)