Tough economic times are softening Canada’s hard line on Chinese investment
Nov 01, 2009 | 04:19 AM
TORONTO There's nothing quite like staring into an economic abyss to shake up a country's perception of its place in the world and where it may have to look for a lifeline once in a while.
Some five years after China Minmetals Corp.'s failed $4.7-billion bid for Noranda Inc., an effort that ignited a political firestorm in Canada, the red dragon is making fresh forays into the country. This time around, the welcome mat appears to be firmly in place.
The brutality of the recession has provided fresh lessons to the governing Conservative Party about Canada's interdependence with other nations and the importance of having friends in faraway places at a time when its No. 1 trading partner to the south is suffering from a wounded economy. Ottawa knows that China in particular—with its growing influence and economic might—cannot be ignored or trivialized any longer.
This year has already witnessed a flurry of Chinese acquisitions in the Canadian resource sector. Several were made in the metals industry, including Wuhan Iron & Steel (Group) Corp.'s $240-million investment in Consolidated Thompson Iron Mines Ltd.'s Bloom Lake property in Quebec, and Hunan Nonferrous Metals Corp. Ltd.'s purchase of Canadian miner Beaver Brook Antimony Mine Inc. for $29.5 million. By far the biggest, though, was China Investment Corp.'s Canadian $1.74-billion ($1.5-billion) investment in Teck Resources Ltd., the debt-laden company that appeared to be heading toward insolvency during the dismal days that followed the collapse of Lehman Brothers. ....
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