Canada urged to join China's new investment bank

克 飞

AWA — The Harper government indicated Monday it is prepared to pass up an opportunity to join allies from Europe and the Asia-Pacific as founding members of China's proposed regional investment bank.

Is Canada, which must make a decision by mid-day Tuesday, missing a golden opportunity to both improve relations with China and cash in on billions in infrastructure contracts in booming economies like Indonesia and Vietnam?

"There's a boat sailing and we're missing the boat," Antony Nezic, president of the Canadian Chamber of Commerce in Vietnam, said to The Vancouver Sun Monday.

Or is Canada right to join the U.S. in being cautious about getting in bed with a muscle-flexing authoritarian regime not known for being transparent in its financial transactions or warm to tough environmental standards?

A federal official, asked Monday whether Canada will join the US$100-billion Asian Infrastructure Investment Bank, cited B.C. Conservative MP Andrew Saxton's comment last week that Canada doesn't need to abide by the deadline.

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"We have also been informed that Canada's participation will be welcome at any time," Saxton told the House of Commons.

China has vowed to commit the first $50 billion in start-up funds, with other countries expected to come up with the remaining $50 billion based on the relative size of their economies.

Washington fears the bank will be used to extend China's "soft power" in the region and won't have the same environmental and governance standards as the World Bank and the Asian Development Bank.

The New Democratic Party, the Liberals, some Canada-based China experts, and Canadian businesspeople in the region argue that Canada should follow the lead of counterparts in the United Kingdom, Germany, France, Switzerland, Australia, South Korea, and India in becoming founding members.

Nezic said Canada's relative strength in areas such as engineering, financial services, education and public-private partnerships (P3) is ideally suited to the objectives of the fund.

Canada's non-participation would raise questions about Trade Minister Ed Fast's numerous declarations that Ottawa is determined to expand trade in booming Asian markets, he said.

Emerging economic giants like Indonesia and frontier markets like Laos and Cambodia have "massive infrastructure requirements requiring trillions of dollars of investment."

Nezic noted that existing infrastructure projects typically involve partnerships with Chinese state-owned enterprises and many "have weak environmental and social controls and other inherent risks."

Having Canada and other western countries involved in the governing structure would represent a huge improvement on the status quo for countries receiving the investment, he said.

That's a view shared by B.C. New Democratic Party MP Don Davies.

Entering on the ground floor "would allow Canada the chance to help shape the policies of the bank at an early stage, and signal that we are serious about building economic bridges in Asia," he told The Sun Monday.

Carleton University's Jeremy Paltiel said not participating in the face of such opportunities is a "lose-lose proposition (that) smacks of parochial small-mindedness, not principle."

But David Mulroney, Canada's former ambassador to China and a frequent critic of the Harper government's on-again, off-again relationship with Beijing, said Ottawa has reason to be hesitant in this instance.

"There is a danger in pretending that China is already behaving as we would like it to behave," Mulroney said.

Read more: http://www.vancouversun.com/news/Canada+urged+join+China+investment+bank/10931666/story.html#ixzz3Vvyd4Ndk