Thank you very much, Mr. Chair.
My area of expertise is China's domestic politics and foreign policy. With that in mind, I'd like to pick up on two points raised by Minister Champagne when he appeared before this committee last week. The minister said that, henceforth, state-owned companies' investments in Canada will be approved only in exceptional circumstances.
Secondly, Minister Champagne told you last November that, after a national security review and based on intelligence he'd received, he had ordered three Chinese resource companies to sell their interests in Canadian critical minerals firms—lithium.
However, the fact is that all Chinese global enterprises are fully integrated into the PRC party, state, corporate, military and security apparatus, because, as party General Secretary Xi Jinping put it, “Party, government, military, civilian, and academic, east, west, south, north, and center, the party leads everything.”
There are no Chinese industrial enterprises existing independently from China's party-state. Huawei, for example, does not self-identify as a Chinese state-owned enterprise, but, like all PRC institutions, its org chart suggests that Huawei's Chinese Communist Party branch takes precedence over the Huawei board of directors in corporate decision-making. Huawei's corporate purpose is to compete prudently in foreign markets and make money. However, as the Government of Canada determined in banning Huawei's participation in 5G software and hardware, Huawei's raison d'être is not just about economic profitability but also to serve other PRC regime geostrategic purposes that threaten Canada's national security.
Chinese law requires that all companies and individuals co-operate with their intelligence establishment and hide that co-operation. That, combined with the Chinese regime's unrelenting cyber and human-source spying on our Parliament, political parties, government departments, universities and businesses, is reason enough to conclude that foreign investment from China must be subject to the most stringent national security test, regardless of what sector or industry the proposed investment may target.
For example, China's so-called police stations are overseen by Chinese diplomats in Canada to coordinate Chinese Communist Party United Front Work Department operations, in order to menace and harass Canadian Uyghurs, Tibetans and human rights activists, subvert Canadian officials, facilitate Chinese Ministry of State Security espionage operations, hand out money for election interference and so on. If these police station operations are inconvenienced by an RCMP vehicle parked outside the station, whether it's in Markham, Richmond, Montreal, or wherever, it is easy for the Chinese authorities to simply inform a Chinese business invested in Canada that the police station will relocate to it premises and to please issue fake letters of invitation to facilitate false visa applications for Chinese police or People's Liberation Army military researchers to enter Canada on false pretenses for covert or grey-zone operations that transfer dual-use technologies to the Chinese regime. We have many examples of this, including evidence given by Canadian government immigration officials in this regard.
Any intellectual property that any Chinese concern becomes privy to through its foreign investment in a Canadian partner is, as a matter of course, going to be covertly transferred through Chinese Communist Party channels to whatever elements of China's Communist Party regime can apply the Canadian proprietary technology or manufacturing process to further China's overall diverse regime interests. We have many examples of this, too.
Finally, I urge a more coordinated approach to all this. Australia's Foreign Investment Reform (Protecting Australia's National Security) Act 2020 was enacted to follow on its Foreign Influence Transparency Scheme Act 2018. I should point out that implementing this latter act—the foreign influence registry—did not instigate any rise in anti-Asian racism in Australia.
I strongly recommend to this committee that Canada look carefully to Australia’s strengthening of laws against covert foreign influencing and espionage, curbs on proxy foreign donations to political parties, and better controls over the security of critical infrastructure. Modelling on Australian legislation could allow Canada to make our legislative improvements in a much shorter time frame. The longer we delay, the worse it gets.
Thank you, Mr. Chair.