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Private Investors Sole Sources of New Chinese Investment into Canadian Energy during Q1-Q3 2016

The China Institute at the University of Alberta’s China-Canada Investment Tracker has recorded no completed investments by Chinese state-owned investors into the Canadian energy industry during the first nine months of 2016, a sharp decline in state-owned investment from years past which has been counteracted by a rise in private investment. Between January and September 2016, there has been C$2.5 billion (US$2 billion) in new Chinese investment into Canada’s energy sector, all from private investors, a marked departure from the past, when state-led investment dominated Chinese foreign direct investment flows into Alberta’s oil and gas industry.

In the past, the flow of Chinese investment into Canadian energy been dominated by state-owned investors. As far back as 1994, 86% of the dollar value of the year’s Chinese investment into energy – or C$1.4 million of the C$1.6 million total – came from state-owned investors. From these small amounts, investments grew, nearly all of which was fuelled by the state side: the first decade of the 2000s racked up C$8 billion in Chinese investment into energy, and C$7 billion – or 87% – came from state-owned sources. 2010 had C$9 billion total, 92% of which – C$8 billion – came from state-owned investors; 2011 had C$5.2 billion total, 94% of which – C$4.9 billion – came from state-owned investors; and 2012 had C$4.23 billion total, 98% of which – C$4.15 billion – came from state-owned investors.

This era of Chinese state-owned investors appears to have hit its high-water mark in 2013, a year which saw a total of C$19.97 billion in new Chinese investment into energy, of which 99.9%, or C$19.94 billion, came from one state-owned transaction that year. By 2014, just C$2 billion came from China, and less than three fifths, or C$1.2 billion, came from state-owned investors. Come 2015, when less than C$1 billion was invested into energy, less than C$500 million – or less than half – came from state-owned investors.

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