China objects to Canada’s ban on Aecon sale

China’s ambassador to Canada has objected to the "politicisation" that led to the blocked sale of contractor Aecon to a Chinese company, saying Canada’s decision amounted to discrimination against Chinese state-owned enterprises.

(I think it is) discrimination that if someone takes certain special actions against enterprises merely because they are state-owned enterprises of China– Lu Shaye, Chinese ambassador to Canada

Expressing "regret and disappointment" with the decision to block the sale for CAN$1.5bn to a subsidiary of China Communications Construction Company (CCCC) on grounds of national security, Ambassador Lu Shaye (pictured) said the move would undermine Chinese investors’ confidence in Canada, and that Canada would be the bigger loser from the missed opportunity.

In a statement Lu acknowledged Canada’s right to conduct a security review.

"However," he said, "we do not agree with the politicisation of relevant acquisition on the grounds of national security. The acquisition itself is a win-win business deal, the rejection will cause losses to both sides, and I am afraid the losses of the Canadian side would be greater."

The decision on 23 May did not elaborate on the nature of the security concerns.

Some observers pointed out that Aecon’s role on a Canadian nuclear power scheme in Ontario and a large hydroelectric project in British Columbia would give a Chinese state agency easy access to "sensitive information".

But Ambassador Lu dismissed such concerns.

In an interview with The Canadian Press, he said "what construction enterprises do is nothing but ditching, burying, and constructing. If such activities concern national security, nothing can be an exception."

He said the Canadian media’s focus on CCCC being state owned amounted to discrimination.

"I have told the Canadian media that China’s state-owned enterprises are not guilty, and have contributed a lot to the welfare of Chinese people, and their existence can be fully justified by China’s political and economic system," he told Canadian Press.

"Through their own efforts, China’s state-owned enterprises have grown more competitive in the global market. They compete for economic benefits in accordance with the market rules, just as all the Western multi-national enterprises do. I think it is … discrimination that if someone takes certain special actions against enterprises merely because they are state-owned enterprises of China."

Lu also warned of a chill in Canadian-Chinese business relations as a result of the decision, which he said "must have sent a negative message to the market and undermined the investment confidence in Canada, especially that of Chinese investors".

He called on the Canadian government to "meet the Chinese government halfway to provide favourable conditions for bilateral cooperation".

Several of Canada’s largest contractors and the Canadian Construction Association had lobbied the government to block the sale, claiming CCCC had unfair access to capital thanks to its status as a state-owned enterprise.

Image: China’s ambassador to Canada, Lu Shaye, during an official 2017 visit with Geoff Regan, Canada’s Speaker of the House of Commons (Chinese Embassy, Ottawa)

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  1. As if China would not do something similar or even much worse- right now they are buying Africa piece by piece. So China – TOUGH.

  2. The Chinese Ambassador thinks it’s discrimination for Canadian companies to object to competing with China’s state-owned enterprises (SOEs)? Has he forgotten that the whole weight and power of the Chinese state are marshaled to support those SOEs? Beijing gives them no-cost or low-cost loans to help them underbid Western competitors. Has he forgotten that Beijing protects the SOEs’ home market from the competition by Canadian and other foreign competitors? Does he think we are that stupid?

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