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Chinese government officials and business people don't know what rules Canada is using to evaluate the proposed takeover of an oilsands producer by the state-owned China National Offshore Oil Corporation, says a top oil expert from Beijing.
"I think the Chinese government people don't understand," said Lianyong Feng, dean of economics at the China Petroleum University and a former executive with the China National Petroleum Corporation.
But Feng said that even if the takeover of Nexen (TSX:NXY) doesn't go through, Chinese interest in Canadian resources and oil companies is unlikely to fade.
"Success or fail, I think it will have no impact on Chinese companies in the future to do business with Canadian oilsands," Feng said.
Feng was in Edmonton on Thursday to speak at a conference on the oilsands at Grant MacEwan University. After his presentation, he discussed the controversial $15.1-billion Nexen deal and the scrutiny it has provoked in an interview with The Canadian Press.
He said Chinese understand that political decision-making takes longer in Canada.
"In Canada, there are more stakeholders," he said with the occasional help of a translator. "Central governments and local people have different opinions and different interests.
"I understand the difficulty to make decisions in Canada. You have to wait the time."
What they don't understand is what the Canadian government is looking for as it decides whether or not the Nexen deal can proceed.
"They don't know very well how (Canadians) evaluate the business deal. Maybe it is a problem but I think we can understand it in the future."
Calgary-based Nexen, which produces oil and gas, would be China's largest foreign takeover to date. Nexen has said it expects the deal to close by the end of the year.
The federal NDP have objected to it, citing national security, environmental and human rights concerns. Canada's spy agency raised a red flag on foreign investment by state-owned firms in its annual report earlier this year.
The Harper Tories are studying whether the deal represents a "net benefit" to Canada.
But NDP natural resources critic Peter Julian says there aren't clear guidelines on what constitutes a net benefit.
The government recently blocked a potential takeover of Calgary-based Progress Energy Resources by the Malaysian state-owned company Petronas, ruling it failed to pass that test. Executives from both companies are meeting with Industry Canada officials to try to figure out what the government wants in an effort to salvage the $6-billion deal.
Feng proposed Canada and China set up a group to work out the conditions under which Chinese companies could acquire and operate Canadian resource assets.
"This association would have benefits for both sides," he said. "(It) can find best practices and regulatory standards for companies."
It can also create more transparency in Chinese-Canadian resource deals, he said.
Feng laughed when asked if Chinese companies felt singled out, given the variety of foreign state involvement in Canada's oilpatch.
"This is very funny," he said.
"In the current world, the China topic is a good story, a very exciting story in some countries. In the United States presidential election, the China topic is a good story.
"But I think it is very normal because the Chinese economy is rising. We are facing the problem about how other nations understand the Chinese economy and the Chinese culture and the Chinese people.
"I think it is a good idea to communicate with each other."
Ultimately, Feng said he expects the Nexen deal to go through.
"I think the deal with Nexen has a good future."
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