Recovery Underway

Calgary, known for its world-famous annual Calgary Stampede rodeo festival, is starting to recover economically from the global crash of oil prices in 2014. Calgary and Alberta form basically the center of Canada's oil industry as the province supplies about 70 percent of the nation's crude production and 80 percent of its natural gas.

"We have seen some improvements this year," Yin said in an interview. "Oil prices have stabilized, unemployment is coming down and retail sales are starting to pick up."

To help spur the recovery, Yin and her colleagues have begun an ambitious effort to lure more FDI to metro Calgary to diversify the area economy.

"Foreign investment has played a major role in Calgary's energy sector and it will continue to do so," said Yin.

"Calgary is still oil dependant," noted Gordon Houlden, director of the China Institute at the University of Alberta in Edmonton. "That will turn into an advantage again when oil prices rebound."

Houlden said Chinese FDI into Canada began in earnest in 1993 and reflects the growth of China's modern economy. "If you map the growth of China's GDP and the growth of investment (in Canada), they roughly correlate," Houlden said in an interview.

At first Chinese FDI was relatively small, even in the energy sector. However, everything changed in 2012 when State-controlled CNOOC Ltd (China National Offshore Oil Corp), purchased Calgary-based oil and gas producer Nexen Inc in a $15 billion deal which at the time was China's largest-ever foreign takeover.

Nexen has oil sands operations in Alberta, shale gas in the province of British Columbia and extensive exploration and production holdings in the North Sea, Gulf of Mexico and offshore West Africa.

That transaction "changed everything," according to Houlden. "It also made Canadians nervous but Canadians have always been nervous about foreign acquisitions. In the 1960s and 1970s they were nervous about US investment but they got used to it."

Houlden said the Nexen deal helped to shift Canadian attitudes toward a more negative tone on foreign investment. "In the last couple of years it has turned positive again," he said.