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Canada and China Deepen Cooperation but Potential Roadblocks Loom

High-level meetings between Asian partners for Canada's energy resources have continued with the reception of the latter’s Governor General David Johnston by the formers Premier Li Keqiang. Johnston has a ceremonial role in the Canadian political system, so the meeting was brief, but he made clear Ottawa's desire to receive the Chinese head of government "as soon as you possible can" make it.

The energy minister of Alberta province, Ken Hughes, noted that energy has become 80 per cent of the relationship between the two countries.

Hughes was there to sign a framework on sustainable energy development with China that gives the province direct access to the highest-level energy strategists and decision-makers in the country. In particular, it establishes a consultation mechanism with the ministry that oversees state-owned enterprises in the sector. Even though the agreement is really only a non-binding memorandum of understanding, it is still a first for any Canadian province with Beijing.

Related article: China’s Insatiable Hunger for Energy Resources

Cooperation between the provinces of Alberta and British Columbia, where the resources would go for Pacific-Rim export, is also not to be taken for granted. In order to dampen the perception of problems about this, Alberta's minister Hughes traveled with Rich Coleman, his counterpart from British Columbia.

On its face, the agreement between Alberta and China merely provides for exchange of experience so that the parties will discuss Alberta's experience of carbon capture and storage projects, ostensibly for China to learn. In practice, however, it is intended to be a first-stage mutual confidence-building mechanism that lays the groundwork for further industrial cooperation. Nevertheless, China's urban pollution problems and the discontent that they sow among its rising middle class are well known.

Chinese elite opinion, however, remains skeptical about Canada's ability to deliver on its own necessary infrastructure construction, due to domestic bureaucratic and political obstacles. This is also a message that Hughes heard in South Korea, where he visited as well.

Related article: Another Canadian Oil Train Derailment Punctuates Crude Transportation Debate

South Korean business leaders told him what he well knows, that the potential consumers of Canada's energy in Asia are looking for the best, fastest deal they can get anywhere they can get it. They warned that South Korea is already beginning to look elsewhere beyond Canada.

China may do so as well if Canada waits too long to show progress. Canada has yet even to ratify the foreign investment promotion and protection agreement with China last September, because it has been criticized for giving Chinese enterprises too much political influence over domestic legislation.

By. Robert M. Cutler

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