Sun Columnist: China Wakes Up to Pollution
This is a good comment by the Vancouver Sun columnist. Recall similar smog in Pasadena, California in 1969 when schools were ordered to cancel classes during the worst days. May be China’s ‘Love Canal’ (1978), especially given all the industrial pollution mishaps that have happened over recent years. In any case, the Beijing haze is a wake up call for the authorities to really start reining in pollution around the country.
Authorities Take Action Against Beijing Smog
Choked in dense smog for three consecutive days, Beijing started emergency response measures on Sunday to curb the air pollution at hazardous levels.
Monitoring data showed the Air Quality Index in most parts of the capital reached 500, the maximum pollution level, on Sunday, the third hazy, grey day.Emergency response measures were adopted on Sunday in some areas to deal with the heavy pollution, a senior official with the Beijing Municipal Environmental Protection Bureau said.
Outdoor sports activities for primary and middle schools were ordered to be halted from Sunday to Tuesday in extreme pollution areas, including Tongzhou, Miyun, Daxing, Mentougou and Fangshan districts, the municipal authorities said.
Construction was suspended at 28 construction sites and 54 businesses reduced their emissions by 30 percent, with Beijing Hyundai Motor Company halting production on Sunday, the Beijing Municipal Environmental Protection Bureau said.
Fourteen inspection teams were dispatched to 14 districts and counties to oversee the pollution-reduction measures on Sunday, the bureau added.
Beijing has a permanent population of around 20 million and some 5.2 million vehicles.
Pollutants, parts of which came from vehicle waste and coal burning in the chilly winter, gradually accumulated in recent windless days. The hazy weather would continue until Wednesday in Beijing, local meteorologists said.
Starting from January 1, real-time air quality monitoring data on PM2.5 intensity in China’s 74 major cities, including Beijing, is available for citizens, a move at the request of the public.
– China Daily
A Couple Iconic New Buildings in China
Galaxy Soho Building, Beijing
(Photo: Hufton + Crow)
Given China’s reputation for bold and speedy construction, it’s no surprise that 2012 marked the arrival of this cool new building in the capital city of Beijing. Designed by Iraqi-British architect Zaha Hadid—the first woman to be awarded the Pritzker Prize—this 18-story office, retail, and entertainment complex consists of four domed structures connected by bridges and platforms, crafted from aluminum, stone, glass and stainless steel. Inspired by nature, the flowing lines and organic forms create a lusciously harmonious effect.
Ordos Museum, Ordos, Inner Mongolia
(Photo: Iwan Baan)
The copper-toned metal exterior and undulating shape of the Ordos Museum reflect the surrounding Gobi Desert of Inner Mongolia. It’s the brainchild of the Beijing-based architectural firm MAD, known for fluid designs and imaginative urban solutions. The company intended the large-scale museum as “the irregular nucleus” for Ordos, a newly developed town that, as of 2011, already has its first architectural icon.
Canadians Should Not be Fickle About Chinese Investment
The previous post rebuked a Business in Vancouver denunciation of CNOOC’s takeover of Nexen. The harangue also attacked University of Alberta professor Jiang Wenran for stating the obvious: “Canada is not the only game…there are places where the speed of projects is much more efficient and the returns much more profitable than the Canadian market…In other words, we will be fooling ourselves if we think Canada is the only dinner party in town and that the Chinese would stick around with only an appetizer’s tasting after we have invited them to buy a full dinner ticket”. This is taken by the author as a “silken threat” from “Chinese economic imperialism”.
Natural Resources Minister Joe Oliver has said development of Alberta oil sands would create 140,000 jobs and more than $600 billion in economic activity over the next 25 years but Canada does not have the financial wherewithal to achieve that by itself. As a Financial Post points out, Canadian companies are not stepping up the plate due to their inability to adjust to new market conditions and formulate a vision forward.
A major problem is the lack of new pipelines to rising markets in Asia, particularly China (Northern Gateway), and the US (Keystone XL). Tight pipeline space depresses oil prices while the oil sands are under constant attack from the environmental lobby and the First Nations, not to mention oppositionists in parliament. This forces Canadian companies to sell assets to or seek joint ventures with willing foreign partners like Chinese SOEs.
The conservative Washington-based Heritage Foundation’s public dataset of Chinese outward investment The China Global Investment Tracker has followed over 400 Chinese investments of $100 million or more from 2005 through 2012. The graphs below compare Chinese Ministry of Commerce figures with those compiled by Tracker scholar Derek Scissors, both of which show revived growth in Chinese outbound FDI since the 2008 financial crisis.
According to the Tracker, the leading recipients of Chinese investment over the past 8 years have been Australia and the US followed by Canada, Brazil, Britain, and Indonesia. Last year, Canada topped the list thanks to the CNOOC takeover and North America as a whole attracted 40% of Chinese investment. Since 2005, North America has drawn the most Chinese investments followed by sub-Saharan Africa with energy leading the way in both direct investment and engineering and construction contracts. After energy is metals with finance not surprisingly stagnating over the past few years.
Although the current focus is North America and particularly Canada, Mr Scissors detects a pattern of Chinese SOEs and others moving in packs across continents. During the mid 2000s, large amounts of funds started moving to Australia but toward the end of the decade, sub-Saharan Africa received a spurt of investment before shifting to South America in 2010-2011. He predicts that if the form hold, Chinese investment should continue to stay in North America for most of 2013 but by year end could flow to other destinations such as Europe (depending how the debt-crisis plays out) and the oil producing states in West Asia.
Thus, Canadians must not be fickle about Chinese investment in Canada, allowing political opposition to hijack projects that benefit both countries. Talking to reporters last December following the announcement of new government guidelines for foreign SOE investment, Hou Hongbin, chairman of Sinpopec Daylight Energy, commented: “I think we need a little bit of time to understand fully the new rules, such as exceptional circumstances, which still puzzles me a bit”.
He added that Chinese SOEs will still consider joint ventures in the oil sands but Canada is competing with many other countries for Sinopec’s capital. “We only invest in commercially oriented projects…it all depends on commercial evaluation”, he underscored.
Rant Against “China’s Economic Imperialism”
A recent diatribe in Business in Vancouver was full of anti-China bile. Within a few short paragraphs, the author called China a neo-economic imperialist, a dangerous and remorseless dictatorship, an anti-democratic rogue state, a currency-manipulator, and an industrial spy-master, not to mention laying into Mao as a mass murderer. And, in the wake of the Harper government’s approval of CNOOC’s Nexen takeover deal, he lambasted that Canada is “kowtowing to Chinese economic imperialism without a peep”. Wow! Such putrid stuff from a guy still lamenting the end of the Cold War.
The point of this post is not to respond to his pubescent outbursts and unsubstantiated rants that the author himself writes “comes straight from a gnarled, bitter heart”. However, his tirade against the Nexen deal deserves a thorough rebuke. Citing a Alberta civil liberties writer, he suggests the takeover is inherently bad for Canada and CNOOC could trample the objections of the BC government, the First Nations and environmental critics if it became a lead partner or major investor in the proposed Northern Gateway pipeline. What a load of bunk!
The Globe and Mail reported last December that prior to approving the CNOOC takeover, the Harper government had negotiated a framework under which CNOOC would submit annual reports to Industry Canada on meeting commitments under the Investment Canada Act (ICA). Although the company did not include binding capital spending commitments beyond the roughly $3 billion a year Nexen spends on oil and gas development, CNOOC has promised to list on the TSX, retain Nexen management and employees to the largest extent, and support oil sands research and social and community projects currently pursued by Nexen.
CNOOC would also base its new headquarters for North and Central America in Calgary as well as incorporating Nexen’s Canadian and American operations and CNOOC’s own multi-billion dollar assets in the region. CIBC World Markets, cited in the G & M article, expects Nexen to spend as much as $3.9 billion on capital projects in 2013. Nexen has assets around the world, including Long Lake oil sands and BC Horn River’s unconventional gas fields. It also has projects in the North Sea, Gulf of Mexico, and Yemen.
Following its decision to approve Nexen, the Harper government insisted that it still welcomed investment from foreign SOEs, whether Chinese or other, but only as joint ventures or minority interests in the oil sands. Soon after, PetroChina announced that it would take a $2.2 billion 49.9% stake in the rich Encana shale gas project. By taking a minority position, the partners would be able to circumvent stringent reviews under the new restrictions. But, the Harper government said that it is examining the proposed deal to see if review is necessary under national security provisions of the ICA.
A recent Canadian Defence and Foreign Affairs Institute (CDFAI) policy paper Feeding the Hungry Dragon made a fair assessment of CNOOC’s foray into Canadian oil sands: “The relatively small role that Nexen plays in the oil patch, the limited size of its assets in Canada, the insignificant amount of Chinese investments in Canada in proportion to total FDI and the fact that any investor, Chinese SOE or otherwise, has to operate within the framework of established laws and regulations that exist in Canada should help put this debate into context. However, resource nationalism can trigger knee-jerk reactions bordering at times on the irrational. As a result, political decisions may be made that are not soundly rooted in economic realities.”
In a following post, I will focus on supposed veiled threats of ‘Chinese economic imperialism’ and the contention that although Nexen is a done deal, Canada should not welcome more Chinese investment in and out of the oil and gas sector. A recent backgrounder by the Washington-based conservative think-tank Heritage Foundation points to China’s global reach that presents it with numerous opportunities for where to invest beyond North America.