Photo: IC

Political tensions between China and Canada have cast doubt on the future of a Chinese company's acquisition of a gold mine in the Canadian Arctic, making it a potential new flashpoint in ongoing diplomatic frictions. 

The Canadian government has ordered a national security review of Chinese state miner Shandong Gold Mining Co's purchase of Toronto-based TMAC Resources Inc under the Investment Canada Act, TMAC said last week, a development that some may regard as a sign of underlying political risks threatening the deal.

While the acquisition is a purely commercial activity, the case is likely to develop as a new controversy at the sensitive moment of strained China-Canada relationship. 

So far, TMAC has only expressed concern that it may take longer-than-expected for the Canadian federal government to complete the review. However, it is worth noting that if the proposed takeover fails the review, or both companies suffer heavy losses from the failure of the deal, it would have an impact on market sentiment, and details of the case as well as the role of political forces would come under public scrutiny.

For this reason, while the acquisition may understandably touch the sensitive nerve of the Canadian side due to the Arctic location or other reasons amid the deteriorating relations between the two countries, we still hope that the Canadian government could play by the rules with necessary caution when it comes to the security review issue. This is because, to a certain extent, a signal that the Canadian government is still willing to ensure the fair treatment for Chinese companies and investors in the country may be even more important than the outcome of the security review itself.

As the China-Canada relationship hits a trough unseen in decades, there have been growing worries over economic and trade cooperation between the two sides, which used to be an important engine for bilateral ties. 

Over the past 50 years since the establishment of diplomatic relations, the trade volume in goods between China and Canada grew nearly 500 times to $74 billion in 2019 from merely $150 million in 1970. China has been Canada's second-largest trading partner for many years. 

As of the end of 2019, the stock of Canadian direct investment in China reached nearly 13.4 billion Canadian dollars ($10.2 billion), while the stock of Chinese direct investment in Canada totaled about 21.2 billion Canadian dollars. 

These achievements have not come easily and should by no means fall victim to political tensions.

It will be a dangerous trend to see excessive political factors dominate bilateral economic ties, a situation that no one wants to see. Therefore, during the turbulent times, it is still essential to call for reserving some bottom lines and breath space for bilateral trade.