OTTAWA: In September, two months after China’s state-owned CNOOC Ltd. made an unexpected $ 15.1 billion bid for Canadian energy company Nexen Inc, Canada’s spy agency told ministers that takeovers by Chinese companies may threaten national security.
The rare warning from the Canadian Security Intelligence Service (CSIS), which was disclosed to Reuters by intelligence sources, did not stop the takeover. That was approved by Canadian authorities recently.
But the intervention and an influential US lawmaker’s warning in October that Canadian companies should be careful about doing business with Chinese telecom equipment companies Huawei Technologies Co. and ZTE Corp. made the approval process for the deal more difficult than initially expected.
“CSIS did not like the Nexen bid and thought it was a bad idea for Chinese firms to be investing in the oil sands. It all played into their greater fears about firms like Huawei,” said one person familiar with the agency’s concerns. “They do not want to wake up one day and realize a crucial sector of the economy is under the control of foreign interests.”
And after listening to the spy service, which usually keeps a low profile, Canada drew up surprisingly tough foreign investment rules that were unveiled when approving the Nexen deal, China’s biggest-ever successful foreign takeover. In a clampdown on companies it deems influenced by foreign governments, Canada will block similar purchases in the future.
CSIS has been silent about what it said to Ottawa on the Nexen transaction, and it declined to comment for this story. It didn’t specifically recommend the CNOOC deal be blocked, but rather warned more generally about such deals with Chinese entities, the person said.
In reality, the government was unlikely to want to block the CNOOC bid, given a high-profile push by Prime Minister Stephen Harper earlier in the year to boost ties with China, and given that a lot of Nexen’s assets are outside Canada, and it has underperformed other energy companies.
By pushing back aggressively, CSIS ensured that it got foreign investment policy tightened significantly to deter similar such takeovers by companies under the sway of foreign governments.
“I think people at CSIS and elsewhere are going ‘Good. That was a very good response by the government’,” said Ray Boisvert, a former CSIS assistant director of intelligence, who retired this year after almost three decades at the agency.
“It did reflect some of those deep strategic concerns that practitioners have had about this kind of investment.”
Specific worries include theft of Canadian intellectual property, espionage, computer hacking and foreign companies gaining too much influence over crucial sectors of the economy, said the person familiar with the agency’s views.
The government could, in theory, nationalize assets if it thought foreign control was problematic. But the pro-business Conservatives would likely find it politically unpalatable to take such a step.
“To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead,” Harper said as he announced the new investment rules.
In October, the US House of Representatives’ Intelligence Committee urged US firms to stop doing business with Huawei and another Chinese telecom equipment company ZTE on the grounds that Beijing could use products made by the two companies to spy.
The House Intelligence Committee’s chairman, Rep. Mike Rogers, a Michigan Republican, urged Canada to take a similar stance, and two days later, the Canadian government indicated it would not let Huawei help build a secure government communications network because of possible security risks.
“The Huawei business caused a lot of political complications for the CNOOC bid,” another person familiar with the CNOOC deal said of the US committee’s report.
Both Huawei and ZTE have repeatedly denied the allegations in the report, and China’s foreign ministry dismissed as “baseless” the idea that security concerns could impede commercial ties.
“We hope that the relevant party can objectively and justly treat Chinese companies’ overseas investment and cooperation plans, and stop actions which harm Chinese companies’ image and do more to benefit the promotion of bilateral trade and business cooperation,” said ministry spokeswoman Hua Chunying.
In its annual report, released in September, CSIS noted risks that included espionage and illegal technology transfers, and said some foreign state-owned enterprises had “pursued opaque agendas or received clandestine intelligence support for their pursuits” in Canada.
The agency did not give details, but added: “When foreign companies with ties to foreign intelligence agencies or hostile governments seek to acquire control over strategic sectors of the Canadian economy, it can represent a threat to Canadian security interests.”
CSIS, hit by controversy in 2010 after its head suggested China had too much influence over some Canadian provincial politicians, did not mention any country or firm in its report.
It is unclear how much, if any, influence the US had on the Canadian authorities’ foreign investment policy.
Fen Hampson, head of the global security program at the Center for International Governance Innovation in Waterloo, Ontario, said he had learned that a US official visited Ottawa in the last few months to discuss mutual concerns about foreign state-owned enterprises.
US Ambassador David Jacobson said he was not aware of such a meeting, but he said officials from the two countries met constantly.
“I would be surprised if almost any issue you could think of has not come up in one or more of those conversations,” he said.
“The US has not sought to influence Canada’s decision with respect to that (CNOOC’s bid)... We respect that decision.”
The Canadian government did not respond to a request for a comment.
Chinese companies have bought up smaller Canadian energy firms before, but the July 23 bid for Nexen was their first attempt to buy one of the larger players.
Nexen has assets in Canada, the North Sea, Nigeria and the Gulf of Mexico. Technology that Nexen and its partners use for deep sea drilling could interest CNOOC.
Asked about the CSIS concerns, a spokeswoman for Industry Minister Christian Paradis replied: “The government has the authority to take any measures it considers necessary to protect national security.”
Yet two people close to the deal noted that the Canadian government did not exercise its option to do a separate review of the potential security risks of the CNOOC-Nexen bid, again signaling its concerns were tied to overall Chinese investment rather than to this particular deal.
Under the new rules, which Paradis is responsible for enforcing, foreign state-owned enterprises can no longer buy controlling stakes in assets in the oil sands, the biggest reserve of crude oil outside Saudi Arabia and Venezuela.
Such enterprises can buy minority stakes in the oil sands, or majority stakes in companies outside the oil sands. Companies deemed to have strong government links will be treated with particular caution wherever they propose to invest.
“When it comes to our security and intelligence services, they would rather pull up the drawbridge than let it down,” said Hampson, co-author of a report on trade ties between Canada and emerging nations that he discussed with Harper in June.
Security fears dogged Canada debate on China energy bid
Security fears dogged Canada debate on China energy bid
Uzbekistan’s $220m education project signals shift toward skills-driven systems: GPE CEO
RIYADH: Uzbekistan’s $220 million education reform deal reflects a growing global shift to align schooling systems with economic transformation, according to Global Partnership for Education CEO Laura Frigenti.
Speaking to Arab News on the sidelines of the Human Capability Initiative 2025 in Riyadh, Frigenti said the agreement, signed with the Islamic Development Bank and the Uzbek government, aims to help the country “accelerate that process of transformation.”
Fully aligned with Uzbekistan’s national education strategies, this project aims to enhance the quality and efficiency of the education system while supporting the achievement of the UN’s Sustainable Development Goal 4.
“Uzbekistan is a country that has a very well-functioning, in a way, education system because under the Soviet Union, education was a big priority,” she said.
“At the same time, [it] was a system that was designed thinking about a world that doesn’t exist anymore. And so, because they are moving very quickly at transforming their own education, they do want to have resources to accelerate that process of transformation and that is the sense of, you know, of the project that we signed today,” Frigenti told Arab News.
The $220.25 million “Smart Education” program includes $160.25 million from IsDB, a $40 million grant from GPE, and a $20 million contribution from the Government of Uzbekistan. The project is already under implementation, with early work focused on school construction and partnerships with UNICEF and UNESCO.
“It’s also a project that is part of the process of finding innovative instruments to finance education,” Frigenti said. “Education, as I’m sure you know, is a very expensive type of sector that, until now has been basically mainly funded either through domestic financing or with the development assistance resources.”
Education for growth
Frigenti emphasized that education systems must shift to meet the needs of evolving economies, and focus on producing skills that are needed to make society progress and facilitate process of growth and so on.
Saudi Arabia, she noted, has made significant headway in this area.
“Saudi Arabia has been understanding this connection between skills and economic growth very well and they have invested in this over the past couple of decades significantly,” Frigenti said.
“Other countries need to get to that and so the kind of things that we are trying to do is to see how can this re-alignment of education with the needs of the economy be translated for countries that do not have the same resource base of Saudi Arabia.”
She added: “And this is where we are working on issues related to financing of the sector, efficiency in the administration of the resources, etcetera.”
Women’s workforce gains
Frigenti also highlighted Saudi Arabia’s progress in gender inclusion.
“I think having a very clear political vision that sets a specific target, like 50 percent of the labor force needs to be female, as in the Vision 2030, and then having the ability of designing a set of policies and programs that leads to that results in record time — that is quite an extraordinary result,” she said.
Zooming out, she described the Kingdom’s broader economic transition as strategic and well-resourced.
“Saudi Arabia is a country that has several strong things going for it. First one, there is a clear vision of where the country, you know, needs to go — and the country needs to go toward an economy that is more diversified, that is not depending on fossil fuels and where you know that there is a whole range of new activities that needs to be started and stimulated.”
She added: “The second part is that to be able to get to that different type of economy, you need a different type of skills. You need people that can do different things, people that can work in services, for example, people that can work in manufacturing and so on and so forth.”
The CEO went on to say: “And then you need to have the resources that on one hand create this skill mix and on the other hand, put in place the infrastructures that allow this to happen. That is rather unique.”
Young population
Frigenti sees Saudi Arabia’s youth bulge as a pivotal advantage. “The very young workforce is accessing the labor market and is going through the education system at this time. So all this has been an exceptionally fertile ground for transforming the education system on one side, but the economy on the other in a very quick time.”
She said they had created “a working group, a forum” that brings together ministers of education, heads of major technology companies, and key government players — with Saudi Arabia playing a particularly strong role.
According to her, the Kingdom wanted not only to contribute its experiences but also to learn from others. “Attention to technology and the role it can play in education is something that I feel is going to be very much at the center of the education portion of the Vision 2050,” she said, adding that this would be highly relevant going forward.
She concluded by saying that Saudi Arabia is actively looking to share and absorb best practices globally.
Frigenti also emphasized that Saudi Arabia is eager to engage in a global exchange of best practices — sharing what has worked for them while also learning from successful experiences elsewhere. “They are very keen on having a kind of exchange with the rest of the world around good practice, what works and what doesn’t work,” she said.
“Events like HCI 2025 are just an example,” the CEO concluded.
Oil Updates — crude extends decline as US-China trade war weighs on global growth outlook
TOKYO/SINGAPORE: Oil prices fell on Monday on concerns the escalating trade war between the US and China would weaken global economic growth and dent fuel demand.
Brent crude futures were down 22 cents, or 0.34 percent, at $64.54 a barrel at 10:22 a.m. Saudi time. US West Texas Intermediate crude futures were trading at $61.28 a barrel, down 22 cents, or 0.36 percent.
Both contracts have lost about $10 a barrel since the start of the month as a trade war between the world’s two largest economies has intensified.
Goldman Sachs expects Brent to average $63 and WTI to average $59 for the remainder of 2025 and sees Brent averaging $58 and WTI $55 in 2026.
It sees global oil demand in the fourth quarter of 2025 rising by just 300,000 barrels per day year-on-year, “given the weak growth outlook,” analysts led by Daan Struyven said in a note, adding that the demand slowdown is expected to be the sharpest for petrochemical feedstocks.
Beijing increased its tariffs on US imports to 125 percent on Friday, hitting back against President Donald Trump’s decision to raise duties on Chinese goods and raising the stakes in a trade war that threatens to upend global supply chains.
Trump on Saturday granted exclusions from steep tariffs on smartphones, computers and some other electronics largely imported from China, but US Commerce Secretary Howard Lutnick on Sunday said that critical technology products from China would face separate new duties along with semiconductors within the next two months.
The trade war has heightened worries that unsold exports could continue driving domestic Chinese prices down.
“Inflation data from China were a window into an economy that is not in shape for a trade fight. Consumer prices fell for a second month in a row in year-on-year terms, while producer prices chalked up their 30 percent straight fall,” Moody’s Analytics said in a weekly note, referring to data released on April 10.
As companies prepare for a possible decline in demand, US energy firms last week cut oil rigs by the most in a week since June 2023, lowering the total oil and natural gas rig count for a third consecutive week, according to Baker Hughes.
Potentially supporting oil prices, US Energy Secretary Chris Wright said on Friday that the US could stop Iran’s oil exports as part of Trump’s plan to pressure Tehran over its nuclear program.
Both countries held “positive” and “constructive” talks in Oman on Saturday and agreed to reconvene next week in a dialogue meant to address Tehran’s escalating nuclear program, officials said over the weekend.
No intention of responding to tariffs imposed by Trump administration — Pakistan finmin
- Islamabad was slapped with 29% tariff rate before Trump’s 90-day temporary pause
- 10% blanket duty on almost all US imports will remain in effect, the White House has said
ISLAMABAD: Pakistani Finance Minister Muhammad Aurangzeb has said Islamabad was concerned about new tariffs imposed by the US administration of President Donald Trump but had no intentions of imposing reciprocal taxes, BBC reported on Sunday.
Islamabad would have been slapped with a 29% tariff rate before Trump’s temporary suspension announcement on Wednesday. A 10% blanket duty on almost all US imports will remain in effect, the White House has said.
“There is a minimum tariff of 10% and then there is an additional tariff, I think we need to talk about this issue,” Aurangzeb said in an interview to the BBC.
In response to a question about reciprocal tariffs, he said: “If your question is whether we are going to give any response [to the US] in return, the answer is no.”
“There is a situation of uncertainty, and we all have to think about how to move forward with this new world order,” the finance minister added.
When asked if he felt Pakistan was losing out in the tug-of-war between the US and China, he said Washington had been a “strategic partner” of Pakistan for a long time, not just in trade but also in other sectors, while relations with China were important in their own right.
A study by the Pakistan Institute of Development Economics (PIDE) entitled ‘Impact of Unilateral Tariff Increase by United States on Pakistani Exports’ said this month when added to the existing 8.6% Most Favored Nation (MFN) tariff, the total duty after the imposition of the 29% tariff could reach 37.6%. This would likely result in a 20-25% decline in Pakistani exports to the US, translating into an annual loss of $1.1-1.4 billion, with the textile sector bearing the brunt of the blow.
The textile sector in Pakistan generates about $17 billion in exports and is the largest employer in the country, according to the Pakistan Textile Council. The industry is expected to face significant challenges from the tariffs, with potential losses of up to $2 billion in textile exports estimated by experts if the 29% tariff rate is reinstated after Trump’s 90-day pause ends.
Despite the risks, the PIDE reports also view the tariffs crisis as an “opportunity for strategic transformation.”
In the short term, it recommended that Pakistan engage in high-level diplomatic efforts to highlight the mutual costs of the tariffs and preserve long-standing trade relations. In the long term, it called for the need to diversify both export products and markets, seeing destinations such as the European Union, China, Asean nations, Africa and the Middle East as offering growth potential in sectors like IT, halal food, processed foods and sports goods.
Saudi Arabia eyes $31.6bn space economy as sector gains momentum
RIYADH: Saudi Arabia’s space economy reached $8.7 billion in 2024 and is expected to grow to $31.6 billion by 2035, according to a new study.
The Space Market Report 2025, released by the Communications, Space and Technology Commission, stated that the growth encompasses all value-added activities and industries derived from technologies and services, with a projected compound annual growth rate of 12 percent.
The Kingdom’s space market—focused on commercial services and infrastructure—was valued at $1.9 billion in 2024 and is forecast to reach $5.6 billion by 2035, supported by increased investment in technologies and infrastructure.
The report aims to chart the growth trajectory of the domestic and global space sectors, while also supporting market development, enhancing competitiveness, and identifying investment opportunities.
CST Gov. Mohammad Al-Tamimi stated that the strong support from wise leadership is accelerating investment, infrastructure development, and the enabling of national talents.
He added that these efforts contribute to the goals of Saudi Vision 2030 and aim to establish a competitive, sustainable space economy both regionally and internationally.
Al-Tamimi also said the analysis is part of CST’s continued work to support the space sector as a new economic driver, contributing to the Kingdom’s global standing in technology and innovation.
He described the publication as a valuable resource for decision-makers, investors, and entrepreneurs to understand future trends and promising growth opportunities in the sector.
The study highlights several movements shaping the space industry, including the growth of Earth observation data analysis, infrastructure services, integrated communications systems, and advanced sensing technologies.
It also notes the increasing development and deployment of small satellites and the expanding role of the private sector in both local and international space markets.
Globally, the space economy is projected to grow from $687 billion in 2024 to $1.8 trillion by 2035, representing a CAGR of 9 percent.
The global space market is forecast to increase from $176 billion to $377 billion in the same period, with a CAGR of 7 percent.
Balanced growth beyond Riyadh vital to Vision 2030, says MBSC dean
RIYADH: As Saudi Arabia accelerates its economic diversification efforts under Vision 2030, ensuring balanced regional development is crucial, according to a senior academic.
Zeger Degraeve, dean of Prince Mohammed Bin Salman College of Business & Entrepreneurship, emphasized the importance of spreading development beyond Riyadh during an interview with Arab News on the sidelines of the Human Capability Initiative in the capital.
“Economic development of the Kingdom outside of the capital city of Riyadh is critical,” Degraeve said. “That still is the intent of KAEC. It’s also the intent of NEOM… you have to bring the whole city along in an economic development process, the whole country.”
He drew parallels with the UK, pointing to regional disparities as a factor in Brexit. “It’s one of the reasons for Brexit, for instance, because of the imbalance in economic development between London and the rest of the UK,” he added.
Degraeve also underscored the role of education in driving sustainable growth, noting that the sector is key to preparing young Saudis for leadership and innovation in a diversified economy.
“Education is a critical strategic sector in Saudi Arabia, with 36 million people and 70 percent below 30,” he noted. “There’s an enormous market that underlines the importance of the sector.”
MBSC is experiencing rapid growth in student enrollment, signaling strong demand for high-quality academic programs aligned with Saudi Arabia’s evolving economic landscape.
“Four years ago, we graduated 40 students and the next year we graduated 100 students. That was already two and a half times the size of the school,” said Degraeve. “But the year after we graduated 320 students… and this year we have graduated 480 students.”
“That’s an enormous growth which shows the market interest in premium business education in the Kingdom,” he added.
Degraeve credited the surge to the Kingdom’s Vision 2030 initiative, which he said has inspired young Saudis to seek world-class business education that equips them for a dynamic future.
“It is Vision 2030,” he said. “The Saudi youth is really inspired by the business future of the Kingdom… and they are looking for good world-class business education. Prince Mohammed Bin Salman College provides that alternative.”
In response to rising demand across the country, MBSC has expanded its reach through regional partnerships and diversified program delivery.
“Since 2021, we work in partnership with STC Academy to offer our executive MBA program, or Master in Management and a Master in Finance programs here in Riyadh,” Degraeve said.
He continued: “Through Riyadh, we have access to Dammam as well. We are offering programs in KAEC also, which allow us to access Makkah and Madinah.”
The college’s modular program format has also made it easier for working professionals to pursue advanced education without stepping away from their careers.
“It’s a format where students fly in, stay for four days in the program, four days per month over the weekend, and then they are back in the full-time employment,” he explained.
Degraeve emphasized that MBSC’s mission is closely aligned with the Kingdom’s drive to unlock new economic value and diversify its economy.
“The main aim of Vision 2030 is diversification of Saudi’s economy,” he said. “You diversify an economy by taking many, many, many initiatives, value-creating initiatives in a wide range of businesses and industries.”
“Prince Mohammed Bin Salman College develops leaders,” he added. “Leaders do essentially two things… they think about new value-creating initiatives… but that’s not sufficient. Leadership also requires us to act. We sharpen… our students’ execution skills.”
To date, the college has graduated more than 1,200 students, whom Degraeve described as “leaders for the future of the Kingdom.”
He also stressed the importance of preparing students for success on the global stage.
“Actually, we have a duty. It’s a responsibility for us to connect with international organizations,” he said.
Degraeve added: “We make them especially effective to work in Saudi Arabia and the Middle East region… but business is a global activity.”
MBSC has partnered with leading international institutions, including Babson College in the US and Oxford University in the UK, to strengthen its global outlook and educational offerings.
