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Let us be precise: Chinese SOEs are controlled and influenced by
the Chinese government and are plainly agents of the Chinese state.
Former senior CSIS official Ray Boisvert has said: “state-owned
enterprises have the same marching orders or essentially the same
mandate or mission” as the broader Chinese state. These companies
have non-market objectives including corporate espionage, the
acquisition of strategic resources and geopolitical calculations.
New reports that Ottawa may relax restrictions on foreign investment in previously protected sectors such as broadcasting and telecommunications is welcome news. It’s the type of structural reform that could provide a long-term boost to the Canadian economy. The Trudeau government has already signalled progress on opening up the aviation sector and will deserve considerable credit if it maintains such ambition across other parts of the economy.
But such a liberalization should not be executed unthinkingly. Federal investment policy should be prepared to distinguish between state-owned enterprise (SOE) investment and investment from different sources – and maintain the capacity to exclude investments that aren’t in the national interest.
Not all foreign investment is created equal. It’s neither an act of market infidelity nor security-driven paranoia to limit SOE investment in certain sectors or from certain countries. It’s a matter of seeing the world as it is.
Open capital flows benefit the Canadian economy directly and indirectly through greater access to capital and new technologies, competency and expertise, and competition and consumer choice.
One of us has recently written, for instance, about how eliminating investment restrictions in the telecommunications sector is the best means of achieving the sustainable, market-based competition for consumer ends that successive governments have prioritized.
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