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China set to buy Canadian

Beijing — China's Communist rulers have a blunt message for anyone who frets about the planned Chinese takeover of Canada's biggest mining company: Get ready for more to come.

In an exclusive interview with The Globe and Mail in Beijing this week, Chinese Foreign Minister Li Zhaoxing made it plain that the controversial $7-billion takeover of Noranda Inc. is just a small element in a much more ambitious strategy of investment in Canada's resources sector to feed China's voracious appetite for raw materials.

"Given our rapid economic growth, we're facing an acute shortage of natural resources," the Foreign Minister told The Globe.

"No matter how plentiful our natural resources, when you divide them by our population of 1.3 billion, the figure will be very small," he said.

"The Chinese government is encouraging Chinese enterprises to make investments in Canada, particularly in the field of resources exploitation."

It is the first public comment on the Noranda issue by a senior Chinese leader since the controversy over the planned takeover erupted last month.

Though the minister did not identify any specific targets for future Chinese buyers, it is known that two of China's biggest state-controlled oil companies are considering major investments in Alberta's oil sands. In other potential billion-dollar deals, Chinese oil and mining companies are looking at lucrative assets held by Canadian companies in Ecuador and Mongolia.

The proposed takeover of Noranda by state-owned China Minmetals Corp. has shocked many Canadian observers, but it is a potent symbol of China's sudden emergence as a powerful global investor and a massive consumer of commodities. China is hungry for supplies and expertise in the natural resources sector, and Canada has both.

The Noranda takeover — which is expected to be finalized by mid-November, becoming the biggest overseas acquisition by a Chinese corporation — has sparked questions by several MPs who have raised human-rights concerns. Some say the deal should be blocked because of reports that China Minmetals has been linked to the use of forced labour in the Chinese prison gulag.

China's Foreign Minister vigorously rejected the human-rights concerns.

"You can tell your readers that they needn't worry at all about China's development," he said.

"In the international arena, we act in accordance with international law and international practice. We will act in accordance with the rules of the World Trade Organization, as a member of WTO."

He insisted that human rights are fully protected by the Chinese constitution, and argued that China's human-rights situation is not too different from that of Canada.

"On human rights, I believe, our two peoples have a lot in common," he said.

"Liberty, democracy, freedom and whatever, we share a lot. What is democracy? Democracy is a way in which people enjoy their rights according to law. If the Chinese people and government are working in accordance with our constitution and law, why do people in Canada worry about this? "I don't think there is anything to give a reason for those people to worry about China's human-rights record. Perhaps those people have not read at all the Chinese constitution. Perhaps they have not been to China and also perhaps they don't know history."

He invoked the memory of Norman Bethune, the Canadian surgeon who became a Communist martyr after he died in 1939 while tending to wounded Communist soldiers on the battlefield after the Japanese invasion of China.

"When the Chinese fought against foreign aggression, it was a very progressive and friendly Canadian who came to help us," he said. "That was a real help to the Chinese people. If you have any questions, any doubts or suspicions, tell them that all of our Canadian friends are welcome to come to China to see for themselves."

He also revealed that Prime Minister Paul Martin will visit China within the next few months.

It will be Mr. Martin's first visit to China since becoming Prime Minister, and it could provoke further questions at home about the Noranda deal and the human-rights issues.

(The Prime Minister's Office has not yet announced the China visit, but Mr. Li confirmed that the Prime Minister will visit China early next year.)

On the economic front, he noted that the two-way trade between Canada and China in the first eight months of this year was nearly 60 per cent above the level of last year. He wants still closer links.

"The two economies are highly complementary, and are yet to tap their tremendous potential, especially in resource and energy co-operation," Mr. Li said in response to a supplementary list of questions from The Globe.

China's dramatic rise on the world stage has triggered anxieties in the West and in Asia, where observers have worried about its fast-growing military budget, its expanding nationalist movement and its territorial disputes with some of its neighbours.

Nobody should fear China's rising influence, the Foreign Minister said. China's own development will, in return, contribute to world peace, he said.

"China's development will not threaten anybody or compromise their interests," Mr. Li said. "China's peaceful development serves not only the maximum interests of its people but also the common interests of people around the world."

Despite the double-digit annual growth of its military budget, China's defence spending remains "at a low level" compared with the United States, he said. The sharp increase this year is "mainly intended to ensure that the livelihood of service personnel improves."

Even as China becomes a global economic powerhouse, Mr. Li insists that it is merely a "developing country" with a "weak economic foundation."

The country will "concentrate on its own development" in the future, he said. "It will take a long and arduous journey and require generations of hard work before China can fully develop itself."

Read more on Saturday of China's dramatic rise as an economic power in China Rising, a special edition of The Globe and Mail.

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