By Michael Den TandtThe economic cognoscenti in this country the ecognoscenti? including senior figures in both the Liberal and Conservative parties and virtually all my columnist colleagues, believe Canadas freshly minted foreign investment protection agreement with China (FIPA) is a no-brainer. Opposition to the FIPA, we are led to believe, is populist twaddle.Likewise the related $15.1-billion bid by Chinas state-owned oil company CNOOC Ltd. for Calgary-based Nexen Inc. is a slam dunk, or it should be. Nexen isnt a major player; many of its assets are overseas. The booty is rich $27.50 share, a 60-per-cent premium over the pre-bid price. Its not as though incoming Chinese Communist Party General Secretary Xi Jinping who, by the way, gave a peppy little speech at his formal unveiling in Beijing Thursday will be camping out on the new Alberta cottages front lawn. This man has better things to do, such as managing the tiny, insular oligarchy that rules a fifth of the people on Earth.Canada, everyone with sense knows, must get in on the China gold rush while theres still time. The United States is mired in $16-trillion in public debt; Europe is, as of Thursday, in recession for the second time in four years. Canadas natural resources 600 projects worth $650 billion ready to go are the single ray of light. China will become the worlds largest economy by 2020. And because much of its territory is still relatively undeveloped, the raw-material need curve is just beginning.All true. Now, however, I must interrupt this column with a nagging, impolitic passage from the U.S. Department of States human rights report on China, for 2011.As in previous years, citizens did not have the right to change their government. Other human rights problems during the year included: extrajudicial killings, including executions without due process; enforced disappearance and incommunicado detention, including prolonged illegal detentions at unofficial holding facilities known as black jails; torture and coerced confessions of prisoners; detention and harassment of lawyers, journalists, writers, dissidents, petitioners, and others who sought to peacefully exercise their rights under the law; a lack of due process in judicial proceedings; political control of courts and judges; closed trials Theres more much more. Well, yes, sigh our world-weary ecognoscenti, there are a few glitches over there. But how will the Peoples Republic ever modernize if we dont deepen mutual ties? Chinas despotic, opaque institutions themselves are the best argument in favour of the FIPA, its proponents insist. The main purpose of a FIPA, declares a federal government backgrounder, is to ensure greater protection to foreign investors against discriminatory and wholly arbitrary practices Japan, it may surprise some to learn, has a FIPA with China. It was signed in 1989. Among other things, the agreement commits each party to protect the business interests and properties of the other. China is Japans largest trading partner and has been since 2007. In 2011, total two-way trade between the two Asian giants was worth $344.9-billion US a new high.Just weeks ago, amid a territorial dispute over miniscule, uninhabited islands in the East China Sea between Okinawa and Taiwan, there were mass protests in 50 eastern Chinese cities. Violent mobs trashed or burned Japanese-owned supermarkets, factories and car dealerships, while police stood by. The damage has since been estimated by the Japanese government at more than $100-million US. Japans FIPA with China, as you may have guessed, was of little use during the riots, or in their aftermath. Japanese businesses have been left to fend for themselves, seeking compensation in Chinese courts.Incidentally, Japan has held the disputed islands since 1895. They are considered by the United States to be a part of Japanese territory and are explicitly covered under The United States Mutual Co-operation and Security Pact with Japan, signed in 1960.At a little-reported forum in Ottawa last month North American security experts were asked to comment on how Chinese state-owned enterprises are different from, say, Canadian corporations. Ray Boisvert, formerly deputy director of Canadas spy agency, CSIS, summed up the consensus view, as I have written before: They operate as organs of the communist party. This, of course, is why the Nexen deal has become such a hot potato: CONOOC is not just a company. Its an arm of the Beijing ruling clique. Rejection of the bid therefore means rejection of the clique. Because the clique utterly controls the country, that in turn will be taken to mean a rejection of China itself.Is this not, to use the precise economic jargon, seriously messed up? The Conservative government blundered into this on the assumption that dealing with China is just like dealing with any other trading nation. It isnt. In attempting to rush the FIPA through with no discussion or study, let alone a credible plan of engagement, the government guaranteed it would become controversial. It now finds itself in a Catch-22. Extrication will not be easy. Michael Den Tandt is a PostMedia News columnist.