China’s action triggers Canada’s review of foreign capital flow rules

China’s foreign direct investment in Canada will reach US$15.7 billion in 2021.

REPUBLIKA.CO.ID, OTTAWA — Canada’s new Indo-Pacific Strategy calls for changes to foreign investment screening. This was due to concerns over Chinese state-owned enterprises, a development that comes less than two weeks after the Chinese president Xi Jinping lecture the Prime Minister of Canada Justin Trudeau on the sidelines of the summit of the Group of Nations of the Group of 20 (G20).

As the Bloomberg page reported, Monday (11/28/2022), the Trudeau government will revise the Canada Investment Act, the main law governing foreign investment, to add new provisions aimed at protecting infrastructure, the country’s resources, technology, supply chains and intellectual property. property, according to a strategy document to be released on Sunday.

The document, an advance copy of which was seen by Bloomberg, does not outline specific changes to the law, but says Canada will act. It’s part of the country’s new approach to China, which the Trudeau government describes as an increasingly disruptive global power that ignores international rules and norms.

“We have to make sure that we protect our national security, period. The point of reopening is really to make sure we have a much more transparent approach and to bring predictability,” said Canadian Foreign Minister Mélanie Joly.

Canada has moved to limit Chinese investment in several important minerals, ordering Chinese companies to divest three junior lithium explorers in early November.

Chinese foreign direct investment in Canada will reach C$21 billion (US$15.7 billion) in 2021, while Canadian direct investment in China will exceed C$14 billion.

Madeline Weber

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