The European Union (EU), being a diverse group of nations of ranging economic strengths, is becoming less cohesive due to China’s influence. The “16+1” network between China and 11 EU member states and five Balkan countries are making it difficult for a consistent EU policy on Chinese investment, which is a tool to increase Beijing’s influence abroad.
The Mercator Institute for China Studies, in its report “Authoritarian advance: Responding to China’s growing political influence in Europe,” says Europe must be able to stop state-owned takeovers of companies that are of significant public interest.
“The EU also needs to implement measures to align BRI investments in its neighbourhood with European interests,” according to the report.
“The European Union faces a big challenge from the 16-plus-one grouping that China has formed, with countries like Serbia, Greece, Hungary, the Czech Republic, Macedonia. All these countries have undermined EU efforts to sanction or criticize China’s human rights record in the U.N.,” said Malik.
Differing Philosophies
Aecon CEO John Beck said he’s not at all frustrated by the length of the government’s review and is confident the investment review will be completed by the end of June.“We are not going to be representatives of a foreign government. We just aren’t,” said Beck in an interview with BNN. He remains adamant Aecon will be run by Canadian management.
Beck is trying to deliver the best return to his shareholders. It’s not up to him to formulate national public policy.
“Some may want us to believe that those companies will have Canada’s interests at heart, but it’s hard to imagine that a state-owned enterprise in China owning a company in Canada has any interest but advancing the interests of China,” he said in an interview with BNN.
Clarity for Business
Aecon, involved in the building of Canadian landmarks like the CN Tower and the St. Lawrence Seaway, being taken over by a Chinese SOE is not a run-of-the-mill acquisition.“Philosophically I’m predisposed against the public sector participating in the free market whether it’s a Chinese state-owned enterprise or a Canadian Crown corporation,” said John Gamble, president and CEO of the Association of Consulting Engineering Companies, in a phone interview. “I don’t believe government should be competing against the private sector.”
Aside from opposing philosophies between Canada and China, the potential acquirer CCCC also has a dubious record including fraud, corruption, weak labour standards, and an abject safety record.
The bottom line for Gamble from a business perspective is that the government has to come up with sound policy that will guide business decisions in the future and help CEOs like Beck.
“We’re dealing with jurisdictions that have very different business cultures and philosophies about the role of the state in the economy, so I think government needs to get ahead of this … so that shareholders and owners of companies that are looking to sell their companies can make informed business decisions in the future,” Gamble said.
Overwhelming evidence suggests the Canadian government should not approve the takeover of Aecon by CCCC due to national security concerns. Dealing with any backlash from China is a smaller price to pay than having a communist regime-backed company competing against private firms to further its own objectives.