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"On my part, I remain committed to the process of dialogue. It is my firm belief that dialogue and a willingness to look with honesty and clarity at the reality of Tibet can lead us to a viable solution."

New rules unlikely to affect Chinese takeovers of Canadian companies: Emerson

January 11, 2008

January 8, 2008
BEIJING - The new national security test on foreign takeovers in Canada
should have little impact on China's ability to buy out Canadian firms,
including in the much-eyed resource sector, International Trade Minister
David Emerson said Tuesday.

The minister told reporters in a conference call from Bejing that he
assured Chinese officials during his visit there that the new guidelines
proposed by Industry Minister Jim Prentice were not designed to thwart
Chinese investment in Canada.

"Canada is anxious to have Chinese investments in Canada, including
investments from the (state-owned) China Investment Corp.," he said,
adding that Chinese officials welcomed his reassurance.

He said the rules outlined by Prentice in December were not meant to
discourage acquisitions from state-owned corporations, but only to
ensure these companies "are operating as economic and commercial
companies, not as a political arm or corporate arm that is simply
delivering a political strategy in another country."

Although he did not elaborate, Emerson appeared to signal that he
considers Chinese investments through its sovereign wealth fund to be
primarily business related, rather than political.

Responding to the high level of foreign takeovers in Canada during the
past few years, the government appointed a blue-ribbon panel to study
the issue last summer, but also announced in December that it would take
a closer look at state-owned takeovers as part of a national security test.

Prentice announced that the guidelines would apply on the "rare
occasions when foreign investments by state-owned enterprises with
non-commercial objectives and unclear corporate governance and reporting
may not benefit Canadians."

He gave no examples of such takeovers, but many interpreted the new
rules as being directed mostly at China, a government that Prime
Minister Stephen Harper had openly criticized for its human rights record.

Among other things, the guidelines will assess whether a Canadian
business to be acquired by a non-Canadian, state-owned enterprise will
continue to have the ability to operate on a commercial basis regarding:

-the participation of Canadians in its operations in Canada and elsewhere;

-support of ongoing innovation, research and development; and

-the appropriate level of capital expenditures to maintain the Canadian
business in a globally competitive position.

The government will also consider whether Canadians will be appointed as
independent directors, employed in senior management positions and
whether the Canadian business or its new foreign owner lists shares on a
Canadian stock exchange.

Emerson, who wrapped up his visit to China on Tuesday before heading to
Mongolia, also expressed optimism that a tourism agreement with China
can be signed.

But if China keeps stalling, he said, Canada will have no choice but to
launch a complaint to the World Trade Organization because he said
China's Approved Destination Status agreement with the U.S. and 132
other countries discriminates against Canada.
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