Prove China spy allegations or 'shut up,' ambassador says

Beijing's representative in Ottawa says Chinese firms are not involved in foreign espionage and he challengesanyonewho says otherwise to produce evidence or keep quiet, in a rare interview airing Saturday on CBC Radio's The House.

Zhang Junsai, China's ambassador to Canada,tellshost Evan Solomon, "I can assure you that our companies working in other countries are strictly doing business according to the local laws."

"If you really have the evidence, come [out] with it. If not... shut up," Zhang says in no uncertain terms.

The Chinese ambassador's comments come on the heels of a scathing report released by a U.S. intelligence committee last month, warningofthe security risksassociated with doing businesswith two of China's leading telecommunications firms, Huawei and ZTE.

The ambassador said"even the United States could not give out evidence."

However,asCBC's Greg Westonreported days after the report was made public,that same U.S. intelligence committee hasturned over to the FBI evidenceof possible bribery and corruption by Huawei, one of the largest telecom companies in the world.

In an interview with CBC News after the U.S. report was released, the chairman of the committee, House Representative Mike Rogers, warned that Canada's national security wasequally at risk.

Zhang said the"so-called security concerns" are "so far, groundless."

China's ambassador blamed theallegations of espionage against Chinese firms on "a Cold War mentality."

CNOOC's bid for Nexen

But a controversial bid by a Chinesestate-owned company has raised concerns about growing Chinese investment in Canada's natural resources.

And while the federal government is reviewinga $15-billion proposedtakeover by China National Offshore Oil Corp.of Calgary's Nexen Inc. under the Investment Canada Act, theChinese ambassador told Solomon there's nothing to fear.

"We're here not to grab your resources. We're here to participate," Zhang said, pointing to the fact that no oil or gas has been shipped from Canada to China yet.

The Chinese ambassador said Canada was "one of the best destination" for Chinese companies to invest partly because of our "transparent policies."

Official Opposition Leader Tom Mulcairhas come out swinging against the deal, sayinghis New Democrats do not believe it's inCanada'sbest interest.

Members of the Conservative caucus are also said to be grappling with the bid, as areamajority of Canadians, who recent surveys suggest are uncomfortable with a major domestic oil company being sold toa Chinese government enterprise.

The federal government,however, isapparentlyfacing pressure from industryto approve the bid in exchange for further reciprocity from China.

The review period has been extended to Dec. 10.

Investment treaty with China

TheConservatives havealso come under heavy scrutiny from opposition parties and critics who havesounded the alarmover an investment treaty Prime Minister Stephen Harperrecently signed with China,saying Canada will come out on the losing end of the deal.

Zhang brushed off the concerns, saying that China has signed similar investment treaties with more than a hundred countries and describing it as an "international standard agreement."

The treaty, formally known as a Foreign Investment Promotion and Protection Agreement, could have been ratified via a cabinet decree as earlyas 21 sitting days after it was tabled in Parliament on Sept. 26.But so far there's no indication on the federal government's websiteof orders-in-council that it has come into law.

Zhang said building "mutual trust" between the two countries is a priority, adding that the economic and trading relations between the two countries are "very important."

This week, Chinese Vice-President Xi Jinping succeeded outgoing President Hu Jintao asthe country'snew leader, assuming the top posts in the Communist Party.

Zhang said political reform is "high" on the government and party's agenda.