Challenges in pursuit of CCFTA

There are many arguments against pursuing the CCFTA such as the threat of Chinese SOEs gaining control of the Canadian market, the double standards China maintains when negotiating free trade regarding tariffs, theft of technology and the argument of incompatibilities between Chinese and Canadian trade systems.

The threat of Chinese SOEs which are backed by Chinese funding swallowing up Canadian firms, thereby establishing its control in the Canadian market. (Chen, 2019, p. 4)

Negotiations with China revealed its interest in having the Harper-Era restrictions, which tightens the regulations on investments by State-Owned Enterprises, to be removed (Chen, 2019, p.4)

China also has strict restrictions in place regarding foreign investments into key sectors of its economy, thus cementing the claim that it wants to control critical resources of other countries without giving them an opportunity to do the same (Chen, 2019, p. 5).

Globerman (2015) stated that Canada has strict regulations with regards to FDI from SOEs and is biased towards SOEs acting against national interests, this is enough to prevent Chinese SOEs from grabbing control of the Canadian key industries (pp. 29-30).

Even though Chinese SOEs benefit from huge funding by the Chinese government, Ljungqvist et al. (2015) used historical data to show how Chinese SOEs make poor decisions in allocating resources to make investments (p. 32).

USTR (2018b) noted that China has opened up more sectors of the economy for foreign investment that were previously restricted (pp. 25-26). This in line with the trend of China gradually opening up to free trade.

China is therefore, moving towards a more open system which welcomes foreign investment and even if China employs its SOEs which were noted to be inefficient on an acquisition spree, Canada has very strong restrictive measures to keep this action in check.

Kindly provide counter argument for debate