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Beijing wary of investing in oil sands

GEOFFREY YORK

Globe and Mail Update

Latest comment posted at 12:51 AM EDT 29/01/08

Energy-starved China would seem to be a natural customer for Alberta crude. But that's hardly the case. ...Read the full article

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  1. Rudy Krueger from High River, Canada writes: I worked with Chinese nationals on oil sands for a year (2006-2007). This does not make me an expert but my wife and I were very interested in them personally because we had a lot to learn. So I have some perspectives. We tend to look at other peoples in an odd way - like this article in the Globe is doing. We act as if they are a "thing" out there and we judge ourselves on the basis of whether we are friendly or reasonable or open-minded. That is self-effacing and introspective and so it is not so bad for the most part. The fact is however, relationships are two-way by definition. On a personal level these (that we met) were wonderful people. ON an institutional basis, they tend to sit back and judge - are we being treated well or are we not? For the most part the Chinese corporate institutions don't get in the game. They like dealiing with countries where they can put their propositions on the table and the locals, in awe of the greatness of China and its capacity to countervail the Americans and Eurpoeans commercially - tend to go for it. Here in Canada Chinese firms are notoriously unsuccessful in deal-making because they do not know how to play on a level field. We do not do well here with take-it-or-leave-it business proposals. This lop-sidedness in their business dealings is pretty well universal so it must be a cultural thing. Also they seem very hierarchial - especially for a "peoples republic." They have arcane rules about where people have to sit in a room and at a business table to show subordination. This goes down hard with westerners. It is institutionalized egcentric. Chinese company culture, in my limited experience, shows a low propensity to trust anyone - even amongst themselves. We have mechanisms for trust here - the rule of common law for example. There did not seem to be any degree of openess on their part and so it often happened that a reciprocal relationship of that kind emerged. They have to learn too!
  2. Dick Lenning from Edmonton, Canada writes: Rudy Krueger you couldn't be more wrong! Chinese FAMILY life is very strict on hierarchy, yes. However, when doing business in China, it is most often done during meals. In any true Chinese-style restaurant (you have nothing like that in High River) the tables are round, signalling a form of equality. When personal relationships are established, you become like family. There is not much separation between business and "family." So please tell me, how can there be trust when Steve Harper and his party work towards destroying China's sovereignty (welcoming separatist leaders, proposing to recognise Taiwan independence, harbouring criminals,) falsely accuse Chinese nationals of espionage and sells out to American interests, while erecting enormous hurdles to Chinese investments in the tar sands?

    Another error in your statement is Chinese business being "take it or leave it." If anything, Chinese merchants and consumers are notorious for bargaining; this kind of culture does NOT exist in North America. And Chinese cannot negotiate with "equals?" Then how is it that Airbus, Areva (French nuclear giant,) Bombardier, Siemens and many, many other Western firms have had so much success in China? How is it that Haier, Huawei (computer networking) or TCL (owner of RCA) have had much success in EU and elsewhere?
  3. Howard Beale from Canada writes: Realistically there will never be any meaningful export of oil from Canada to China so let's not waste any of each other's time.
  4. John Fedup from Canada writes: South Korea, Japan, Taiwan, and India are all potential customers for Canadian oil as the Middle East situation ultimately descends into chaos. China may indeed become the world's number one economy but we will be better off developing trade with numbers 2,3, 4, 5, and 6. Screw China.
  5. J D from Vancouver, Canada writes: Canada can do business with China without adopting or endorsing its political ideals. The real question is whether or not Chinese SOEs and their close friends can separate political objectives from commercial ones. To date, the answer has been an unfortunate "no".
  6. The Iconoclast from Canada writes: J D from Vancouver, Canada writes: Canada can do business with China without adopting or endorsing its political ideals. The real question is whether or not Chinese SOEs and their close friends can separate political objectives from commercial ones. To date, the answer has been an unfortunate "no".

    It was our PM Steve that boasted not selling out Canadian values to the "almighty dollar" of trade. Tell him to separate political objectives from commercial ones.
  7. J D from Vancouver, Canada writes: Mr. Iconoclast, I'm afraid you miss the point. By separating the business from the politics you ensure you're not selling out. Our PM has got this one right.
  8. Rudy Krueger from High River, Canada writes: Mr. Lenning I kind of knew that some "defend the Chinese" nonsense would get thrown into the mix. I took great care to state what has been "my experience in business" not in a Chinese family or a Chinese (Canadian) restaruant. I have no intention of competing in ignorance with ignorance. Here in America/Canada there is a huge difference between any two families, restaurants and social groups. Business behaviour is not at all the same as political or familial behaviour. Your simplistic homogenization is typical of liberal generalization. If a bigot were to say "all Chinese are this or that," you'd jump on it in their defense. Yet you make a general point that all Chinese are sit-around-the-table egalitarians. What about all that stuff about their record in human rights - round table illustrations?? China is much more multi-cultural than we are and most of the groups hate the rest. Sound like egalitarianism to you? You boil down an extremely complex issue into the usual lukewarm pudding we get from such shallow thinkers. In any event the Chinese (if there is a generality to be made) do not need you to defend them. There are more than a billion of them in China alone. They will look after themselves. The "spys" they are accused of having in Canada are not accused so much looking over our shoulders as over the shoulders of their fellow ethnic group members. That too must be a complete fabrication - CSIS better contact you and get themselves sorted out - they are obviously biassed. Business spends millions every year teaching its members how to survive and prosper in "Chinese business circumstances." This must be a waste since all they had to do is call you up and have a briefing on round tables in restaurants and family values. I guess the Red Guard and the Cultural Revolution never happened - or maybe it was in the San Franscisco's east end and we all got the address wrong. What colossal rubbish!
  9. MJ M from Fort McMurray, Canada writes: I find it somewhat ironic that the Chinese feels uncomfortable doing business in Canada, while most Canadian's would feel uncomfortable with the Chinese govt owning the Oilsands or the nickel deposits in Ontario.
  10. George Bush from United States writes: I am George Bush and I approve of Stephen Harper's plan to keep all that oil for America. Canada belongs to America, so you folks better not waste time developing export pipelines to Asia.
  11. Mik B from Ottawa, Canada writes: A summary of points i might comment upon. Individuals as individuals, business rep, govt rep. Canadians are different in different roles too. Common Law foreign to Chinese...likely true(perhaps regards any law) "take it or leave it...vs negotiated bargaining". Experience with multiple stakes holders and influencers is perhaps more specificly what Chinese lack. hierarchy can exist in many different forms/structures. - example: French take-over of Cdn fed govt.(since 1974). French language use was a joke in 1975, now - if you do not speak French...dont ever expect to become a supervisor. Chinese Govt owning oil sands or Ontario nickel. A BIGGY. Who says China could not cash their USA reserves and outright buy it now? Sorry BUSHwacked, Canada would likely act as your worst terrorist should you invade...but then just buying Canada up is so much more simpler. Granted, Canadian laws likely help(hmm...they likely help the Chinese too). I suggest that the issue of ownership of Canadian Water will be one of the more interesting debates this century. Seperate political from business. My sense is that business drives politics. Note decline in Britain since 1960, increase of middle east due to oil, increase of USA from 1945. Who heard of Palestinians or Muslims prior to 1960?(granted, most of us were not alive then). I prefer to imagine that Canada does have something to say about Human rights in China...even if only examplifying what living amongst foreigners is what Canada is mostly about. have fun with your replies. recently retired.
  12. Howard Beale from Canada writes: Dear George, we are happy to export our oil to the US because our producers get their highest netbacks for doing so. If it were more profitable to ship to Asia we would do so but it's not likely that the shipping costs to Asia will ever be less than the shipping costs to the US.
  13. r b from Calgary, Canada writes:
    Rudy Krueger - my experiences in dealing with Chinese interests on 2 oilsands issues mirror yours to a degree.

    In both cases, although ostensibly dealing with "separate" Chinese firms, we quickly discovered that the second suitor was asking the exact same technical questions that we refused to answer based on proprietary data (without assurances of copyright adherence). Right down to a few typographical errors on the questions sent to us.

    During the entire process the Chinese officials were polite, proper, inquisitive and professional.

    It was however a frustrating and extremely circuitous process, and in the end we simply refused to return any more calls without commercial assurances.

    But, I must say that they were so nice throughout it all that it would have almost been a pleasure to have had our pockets picked by them.
  14. bagoverhead guy from Delta, B.C., Canada writes: Our experience in China was similar to "rb's". Forever going 'round the mulberry bush', trips into China to meet further 'decision makers' and so on. Ultimately, we did a licencing deal whereby 'an instrument factory' produced the product under licence with a royalty stream attached to us supplying a key component per unit. A similar deal was eventually done in India in half the time, with more profit.

    Far too many key Canadian firms have been sold to foreign buyers over the past few years, and I'm in favor of slowing down this bleeding away of Canadian expertise and resources.

    Do we really want to be grouped in with the five countries mentioned in York's article anyway??
  15. Don Portz from Trochu AB, Canada writes: Given China,s move to world economic dominance (which I ultimately doubt) I agree with a previous poster that we can just as easily increase our trade with number 2,3,4,5,6. Also China,s love for the autocratic countries etc could well turn out against them as they have a tendencie of instability and could fall apart or into chaos, such as Kenya. However they may also be waiting for that to happen with a look to World domininace.
  16. Rona Baird-Zundel from Arvida, Canada writes: There are a number of similarities between the governments of Alberta and China. A major one is that the Chinese Communist Party doesn't care about the health of its citizens and is willing to wreak any level of toxic emissions upon its citizens: the Conservative government of Alberta does not care what toxic substances the multi-national oil/tar companies dump into their settling ponds and then into the adjoining river and does not care how much carbon dioxide is pumped into the environment in trying to sweat the oil out of the tar, thereby screwing up the environment for future generations of Albertans, Canadians and inhabitants of this earth.
  17. Lou Bix from Van, Canada writes: Wake up Canada.
    We have the oil. We make the terms.
    It's not like we are hurting for buyers.

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