Author: Yuen Pau Woo, President, Asia-Pacific Foundation of Canada

The single biggest investment by a Chinese entity in a Canadian company was concluded on July 15 when China Investment Corporation (CIC) finalized its purchase of a $1.7-billion equity stake in Teck Resources of Vancouver.

A few weeks earlier, the world’s largest bank — Industrial and Commercial Bank of China — established a presence in Canada with the acquisition of the Bank of East Asia (Canada). These deals are important landmarks in Canada-China economic relations that could point the way to improvement in the broader diplomatic and political relationship.

It was a coup for Teck to secure CIC’s investment for 17per cent of the company in Class B shares, with a guaranteed lock-in period of 12 months. The deal not only brought in much needed cash for the debt-laden company, but also a formidable partner with impeccable connections in the very markets that will drive demand for Teck’s production of metallurgical coal and other minerals. This deal alone has quadrupled the stock of Chinese foreign direct investment in Canada. Read more…