After reading Yue Zhang’s post on the sale of Motorola to Lenovo I started thinking about politics effect in marketing and business. Politics has great effect on how business is done overseas. Regulations, tariffs, and laws hinder a lot of business opportunities and a very obvious one would be Canada’s prevention of a foreign investor, China, from large investments in the oil sectors (Gault, 2014). The Canadian government has regulations that are preventing Chinese Companies from acquiring oil and energy companies. Chinese companies have been suspicious that Canada is deliberately making it tough for Chinese companies’ acquisitions of oil and energy companies to pass through reviews. I understand that the Canadian government may be cautious to pass through massive acquisitions by state-backed companies from China, but it’s consistent denial of the acquisitions aren’t bringing them a reputation of being good international business destination. Canada has most of it’s oil and energy exported to USA, but USA may not always keep the importing of oil and energy from Canada at a consistent amount. If Canada leaves an unforgettable bad experience for China, then perhaps future negotiations may not go as smoothly as they could. Let’s not even think about China innovating new methods to sustain the energy and oil needs in their country and perhaps taking their vision completely away from Canada to Middle East. Canada should in my opinion stay on good terms with China since China is a major player in the international market. Another interesting fact that occurred due to the strict regulations in Canada is the new method China came up with in response to their perceived suspiciously tough reviews of their acquisitions. China may just decide to purchase land and develop the oil and energy sites themselves, since land acquisitions are more lenient than company acquisitions (Vanderklippe, 2014). Perhaps Canada may have to reconsider their decisions and plan for targeting a different market.
http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/for-china-an-oil-sands-investment-that-cant-be-blocked/article17446725/
http://www.albertaoilmagazine.com/2014/01/seekingthedragon-going-up/