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The real decision that Stephen Harper needs to make about deals like the Chinese takeover of Calgary-based oil firm Nexen is whether he can use them as a bargaining chip.

Mr. Harper must make a call soon on whether he allows China's CNOOC Ltd. to buy Nexen for $15.1-billion, and in the process, he's promising to set out new guidelines for foreign takeovers.

The business community and the NDP are calling for the murky rules for foreign-investment approvals to be clarified. Still, when it comes to state-owned enterprises, the rules must leave enough room to apply a little leverage. China, after all, would do the same.

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"Let's be more Chinese in the way we negotiate," said Fen Hampson, a distinguished fellow at the Centre for International Governance Innovation, and a Carleton University professor.

Along with three widely respected co-authors, Prof. Hampson wrote a report on new strategies to expand trade in emerging markets – Winning in a Changing World – which is getting close scrutiny inside Mr. Harper's government. It calls for clearer foreign-investment rules, but also for Canada to use such foreign investments for leverage, to try to pry open the doors for Canadian investors in China and other emerging markets.

Up to now, Canadian reviews of foreign takeovers have, at least in theory, been based simply on whether the deal is economically good for Canada – whether it will create jobs or wealth here.

For most takeover bids by private companies, that's the right test. And it's a good idea to clarify the black-box process for applying that "net benefit" test, so potential investors aren't discouraged by seemingly arbitrary Canadian reviews.

But state-owned enterprises are different because they are the arms of foreign governments. Sometimes that matters. Their takeovers raise fears that foreign governments could try to hoard resources or manipulate markets or use their economic power in Canada to influence Ottawa. The Canadian Security Intelligence Service warned in September that some state firms get spy help from their governments; Canada would have to expect to spend more on counterespionage.

Chinese takeovers are unpopular. Mr. Harper could just flatly reject them. But he doesn't want to signal that Canada is closed to all Chinese business or state-owned firms. He's more likely to set rules to limit them, perhaps preventing state firms from dominating sectors, like oil, and applying conditions on Canadian involvement in the companies.

But there's something else Canada dearly wants, too – more access to invest and trade in foreign markets. And right now Canada has something China and other countries want – a stable market from which to buy resources. Ottawa can use this to apply a little leverage.

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That doesn't mean Canada should ask for a quid pro quo every time it reviews a foreign takeover by a state company. Instead, said Len Edwards, former deputy minister of foreign affairs and co-author of the Winning in a Changing World report, a new policy for such takeovers should state that approval depends in part on whether Canadians have had success in investing in their country.

That might sound esoteric, Mr. Edwards said, but it would have an impact when state-owned firms from China or another country want to buy a Canadian company: " Now they're looking over their shoulder and saying, 'Okay, what have we done for the Canadians in the last little while? Anything at all?' "

Prof. Hampson said he thinks the investment reviews should allow for a variety of conditions for state-owned enterprises, so that instead of just approving or rejecting a takeover, Ottawa could, for example, insist on a Chinese company entering a joint venture with a Canadian one. That's what the Chinese do with us.

Then, the governments that own state firms trying to buy Canadian resources will understand they have to offer more of what Canada wants to close a deal.

Campbell Clark writes about foreign affairs from Ottawa

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