The great call of China

WELLS: China’s like a compulsive shopper with a bottomless wallet. No wonder Harper’s joined the rush to the East.

by Paul Wells

The great call of China

David Gray/Reuters

TV reporters travelling with Stephen Harper to China this week are desperate for some colour to go with all the talk of pipelines. The Prime Minister’s Office, more adept at serving up pageantry than it used to be, has served up a couple of old standbys.

Mark Rowswell, a television entertainer who has been famous in China as “Dashan” for longer than Harper has been in politics, was designated as Canada’s goodwill ambassador to China. And in this trip’s worst-kept secret, a Saturday visit to the Chongqing Zoo is designed to ensure the Harpers will be followed home by some cuddly panda bears for the Calgary Zoo.

The message sent by those announcements is one of continuity and sure value. The message sent by just about everything else in today’s China is one of constant turmoil. Harper’s predecessors used to arrive in Beijing as rare emissaries from the outside world. These days, the outside world sends visitors at such a heady tempo that Harper was in some danger of being run over on arrival by the next carpetbagging potentate if he didn’t clear off the VIP runway lickety-split.

Germany’s Angela Merkel was in Beijing only last week. It was her fifth visit. India’s foreign minister is in town at the same time Harper is. Britain’s finance minister and the U.S. treasury secretary visited in January.

In a world hungry for growth and certainty in the aftermath of the 2008 market tumble, China is a dream customer, a compulsive shopper with a bottomless wallet. The country is going through the most massive and rapid urbanization in human history, its citizens moving from villages to high-rises by the tens of millions. Thirty years ago it was a net energy exporter. Now it is the world’s second-hungriest energy customer after the United States, which it could surpass in a decade. China’s transformation creates “a seemingly endless demand for concrete, steel and copper wiring,” Daniel Yergin writes in his book The Quest: Energy, Security and the Remaking of the Modern World. What China needs most of all, Yergin writes, is energy. “It all adds up: more coal, more oil, more natural gas, more nuclear power, more renewables.”

But above all, more oil. China’s 2010 auto sales were up 32 per cent over the previous year, to 18 million cars and trucks. (The figure for 1990 was 43,000.) Electric cars are a negligible fraction of that market. The rest need gasoline to move. What makes China an even more alluring market is that the traditional markets for energy are importing less than they used to.

“It is a reality that North America and Europe are going to increasingly become less dependent on Middle Eastern oil,” says Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution in Washington. “The demand for Middle Eastern oil is shifting to Asia: China, India, Korea, Japan. It will have profound implications on international relations and who’s up, who’s down.”

Most analysts assume the bulk of Canadian petroleum exports will likely keep going south to the U.S. Indeed, despite the fuss Harper has made about U.S. President Barack Obama’s decision to delay approval of TransCanada’s Keystone XL pipeline project, the U.S. will remain the destination for most of Canada’s energy exports.

But if Canada wants to be in the game of maximizing petroleum exports—a big “if,” but that’s definitely the game Harper wants to be in—then medium-term U.S. trends aren’t encouraging. Total U.S. oil imports in 2011 were down five per cent over the previous year, continuing a longer-term trend. The same technological advances that have allowed the exploitation of Alberta’s oil sands are permitting inland and offshore oil development no U.S. oil company could have contemplated a decade ago. And suddenly Canada isn’t the Americans’ only oil-rich neighbour. Deep-water wells off Brazil are on track to produce five million barrels a day by 2020. Obama was in Brazil a year ago to pronounce himself an eager customer.

Unlike the Americans, the Chinese are in no position to be picky about their oil sources. They’ll take the stuff wherever they can get it. This is a source of headaches for Harper, as well as opportunity. The Conservatives have taken to describing Canada’s petroleum exports as “ethical oil,” but the Chinese are fabulously unfussed by such considerations, which helps explain how Iran became their third-largest provider of oil.

As Western countries divest in Iran to protest, and seek to curtail, the ruling regime’s nuclear ambitions, Chinese companies have moved into the vacuum. Trade between the two countries was up 55 per cent last year, to $45 billion. Entreaties to President Hu Jintao to reduce that trade have come to naught. Reducing China-Iran trade was the goal of U.S. Treasury Secretary Tim Geithner’s trip to Beijing last month. He went home empty-handed.

Obama has urged Middle Eastern oil exporters to sell more oil to China in place of Iranian oil, and on odd-numbered days he may even wish Canada would do the same. But that’s not how oil works. China will buy some of ours and some of theirs. In the meantime, it will, it seems, keep opposing Western attempts to use sanctions to bring the oppressive regime in Syria to heel.

Harper vowed to raise with his hosts his concern over the Chinese-Russian veto of United Nations sanctions against Syria. But meanwhile, the Chinese regime’s treatment of its own citizens continues to dismay. Last month, Gary Locke, the U.S. ambassador to Beijing, said he’s seen a “significant crackdown on dissension,” fuelled in part by fear on the part of China’s rulers that the pro-democratic “Arab Spring” would prove contagious.

At a media briefing on the eve of Harper’s visit, reporters invited a Canadian official to comment on Locke’s remarks. “We’re focusing here on the Prime Minister’s visit to China,” the official replied. “We want to make sure it’s a successful visit.”

If there’s one thing that 20 years of on-again, off-again Canadian engagement with China has shown a succession of Canadian leaders, it’s that no course of action will protect them from domestic criticism. If they shun China, as Harper did until 2009, they will be criticized for putting ideology ahead of opportunity. Embrace China and they will be called opportunists.

Harper has gamely tried to argue Jean Chrétien was a bigger opportunist. “We reject the approach of the previous government, which said it’s impossible to have commercial relations with China at the same time as we raise difficult questions of democracy and rights,” he told La Presse last week. “We do both.”

This is revisionist. In a speech to Shanghai law students in 2001, Chrétien said Canadians “are concerned when they hear reports from China of interference in the right of free expression. Or that people are imprisoned and badly treated for observing their spiritual beliefs. These reports transgress our most deeply held convictions.”

From the beginning, though, Chrétien decided not to let transgressions get in the way of a deal. After a lag, Harper has arrived at the same conclusion. Both decided to go where the growth is, and it’s really hard to do that without going to China.




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The great call of China

  1. If Mr Harper wanted Canadians to believe he is balancing opportunity against convictions he would NOT have travelled to China with a plane load of executives whose ONLY purpose is opportunity.  In fact those accompanying Harper are dominated by the exact same executives whose proposals to develop oil sands and a pipeline export system are the subject of regulatory hearings currently underway in Canada.  Since Harper has made it very clear that these projects will be approved by his government regardless of the findings of regulatory bodies, it is reasonable to assume that Harper and these executives will be talking with the Chinese goverment, whose own national oil companies are also proponents of the projects, about the crude oil purchase agreement.  Of course none of the opponents of these projects has been allowed to accompany Harper to China and you can be sure he has done his utmost to make sure their voice is not heard.  In fact he and his ministers have vilified opponents as being controlled by foreigners, even though the proponents are thoroughly controlled by foreigners, primarily the government of China. 

    My bet is that there will be a meeting between the project proponents and the Chinese government this week where plans for the development of oil sands projects and the pipeline export system wil be decided upon, including how the proceeds will be divvied up.  This will include handsome compensation for those who helped make it happen.  Of course there will be no documentation at this time.  That will wait for a time when there is more appealing balance of convictions and opportunity, after the regulatory hearings have run their course. 

    Welcome to the way business gets done when China has the hammer and Harper is at the helm. 

    • I think they just do not want a repeat of the Mackenzie pipeline – 37 years of negotiations, 9 years and $16 million to study – then it gets approved in 2010 and the natural gas prices tanked making spending $16.2 billion questionable.

      • ummmmm…. pretty sure that Imperial Oil is the most significant reason the Mackenzie pipeline isn’t built yet, they don’t want to put up the massive capital needed.

      • That’s a gross mischaracterization of what happened. The Berger report turned down the pipeline because most of the people of the north [ who happen to be native] did not want it at the time and for once were listened to. The children of those same people are now onside. 

      • The primary delay was due to the fact that the courts found that the aboriginal people owned the land through which the pipeline would go and also most of the natural gas resources as well.  The current government has studiously avoided any action on settling this issue and has further aggravated the native people, so these issues remain unsettled.  However, Harper has ignored the Supreme Court on several issues, so he might ignore it again in his haste to sell bitumen to China before the price goes up, just so he can say he is bringing some prosperity to Canada.  . 

    • Excellent observation.

  2. Well finally Harper starts to clue in. Human rights will not come to China because another government pushes the issue or stamps its feet or holds its breath. You could try to entirely isolate them from the world and it still wouldn’t happen. They’re too big and too powerful to care, and all we would end up doing is making them an enemy.
     
    Just as has been pointed out time and again, the way to improve the lives of the average Chinese citizen is to increase their affluence. This is why improved trade links is such a good idea.
     
    Not only do you create an increase in business and social, but the affluence gained by people in China leads to a better standard of living, which incrementally leads to an educated populace with increasing influence as their numbers become overwhelming.
     
    With an open trade world will come shared culture and shared rights.
     
    It may be a slow way to do it, it may irk our sensibilities, but it the most sure path to liberation.

    • Open culture is great and MAY lead to shared rights, but when trade is being put in place for the benefit of an oppressive regime and its favoured cronies, it will hinder rather than help.
      In fact, the more we do trade the more it becomes OUR best interest to keep these people disenfranchised.

  3. “These days, the outside world sends visitors at such a heady tempo that Harper was in some danger of being run over on arrival by the next carpetbagging potentate if he didn’t clear off the VIP runway lickety-split.”

    …are we free to call our PM a carpetbagging potentate then? I thought he was a rug merchant. :)

     ”The Conservatives have taken to describing Canada’s petroleum exports as “ethical oil,” but the Chinese are fabulously unfussed by such considerations, which helps explain how Iran became their third-largest provider of oil.”

    ‘ But Mr Ha Po, we don’t care bout your ethical oil see!”

    ‘No problem, we’ll just slip a couple of these little beauties in front, shall we? There, now we got unethical oil…isn’t English wonderful?’

    ‘Yeah! Sure! Whatever! Just make sure you deliver ok !’

    I remember that Chretien speech and most of all those tags that had us all looking just a wee bit foolish.

  4. Why is this story illustrated with a Soviet flag, and not a Chinese flag? 

    • The flag shown is the flag of most communist party organizations, including the Communist Party of China. 

      • Your response is a non-answer.  The story is about China and not communist parties .

    • The responding answer isn’t bad, but I agree …. the Chinese flag would have been more appropriate to the column.

  5. I’m not sure what the purpose of the article or comments so far is. The volume of oil Canada has to sell to China is miniscule, and the window of opportunity won’t be open long. China is building nuclear reactors at a fantasical pace, ditto for electric cars, and won’t need any more oil within 20 years. By the time Canadians learn to sell to China, the Chinese will own most of the companies and property in Canada that the Americans don’t already own, and any Canadian opinions on trade with China will be irrelevant.

    • A little exaggerated but perhaps not too far off the mark.  And all they while they’ll be incredulous that we’re not nationalizing the more profitable investments they have here, which is what they would do if the situation were reversed!

      • Bingo! 

  6. The 99% say “Yes” to free trade with free people.
    And the 99% are also PROTECTIONIST:
    Protecting human rights
    Protecting democracy
    Protecting the rule of law
    Protecting a free-floating currency
     
    The 99% want TARIFFS on goods and services which are subsidized by a lack of human rights, democracy, the rule of law and a free-floating currency.

    The 99% say “NO” to the Communist Party of China: BOYCOTT Chinese goods and services.

    • We should trade NOTHING with china. Import nothing and defintely not send OUR oil there. We as a nation should be the first to stop trade and not keep enabling an oppressive regime. SMASH COMMUNISM DOWN WITH THE RED THREAT

      • Areed. We should be using tax dollars to build up our armed forces and tightening our borders to immegrating people as well. Canada is beatiful and wide open and needs to get away from the greedy clutches of capitalism. If we traded from province to province we would be far better off. No more out of country items should be accepted. We are a self sustainable country who should live and let live. All those opposed………oh well

      • Where on earth did you ever get the idea there is anything communist about China.  It’s the largest capitalist oligarchy on earth… and has been since Deng.

    • Not sayin’ I disagree… but you don’t live in Alberta, do you.  Here… those of us who agree with statements like yours are in lesser supply than that 99%.

    • Nice video! : )

  7. Excellent article!

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