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Prime Minister Stephen Harper begins the official part of his second visit to China in just over two years today as Canada seeks to deepen energy ties and win business for companies such as Manulife Financial Corp.
Harper, who is leading a delegation of more than 40 Canadian executives, will meet Premier Wen Jiabao today in Beijing, hold talks with President Hu Jintao tomorrow and meet local Communist Party officials over the next four days as he seeks to assure Chinese leaders the Asian country is welcome to invest in Canadian natural resources. Harper will also push for greater access to China for Canadian banks, insurers and firms such as Bombardier Inc., a Montreal-based plane and train maker.
Harper will be impressing upon the Chinese government and firms Canadas openness to Chinese investment in our economy, Andrew MacDougall, a spokesman for Harper, said in an interview. He will also seek to expand and deepen the strategic partnership between our two countries, including by discussing opportunities to improve the investment climate for Canadian firms operating in China.
Harper, who last month called diversifying Canadas energy exports a national priority, is seeking to reduce the countrys reliance on the U.S., after President Barack Obama rejected TransCanada Corp.s $7 billion Keystone XL pipeline to ship Canadian oil to the Gulf Coast.
Executives in Delegation
Harpers delegation includes Patrick Daniel, head of Enbridge Inc., the pipeline company that plans to build a link between Albertas oil reserves and the Pacific coast; Tim Gitzel, chief executive of Cameco Corp., the worlds largest uranium producer; Marcel Coutu, chief executive officer of Canadian Oil Sands Ltd., which holds a stake in the Syncrude oil venture along with China Petrochemical Corp.; and executives from Scotiabank and Manulife.
Harper will meet a group of Canadian executives today before seeing Wen at Beijings Great Hall of the People.
Canadian Foreign Affairs Minister John Baird, Natural Resource Minister Joe Oliver, Agriculture Minister Gerry Ritz and Trade Minister Ed Fast are also on the trip.
Harpers Beijing itinerary also includes a meeting tomorrow with Vice Premier Li Keqiang and an address to the Canada-China Business Forum. The Canadian leader flies on Feb. 10 to Guangzhou, capital of Guangdong, the nations most populous province, where hell meet Communist Party Secretary Wang Yang and give the keynote address at a dinner organized by Canadian chambers of commerce in the region.
On Saturday, Harper flies inland to the municipality of Chongqing, where he will meet local Party officials, and visit the citys port and zoo, before departing for Ottawa.
Market Access Issues
As with all partnerships and trading relationships, there are challenges, Harper said in an interview last week with Xinhua, according to a transcript provided by the news agency. There are several market access issues for Canadian companies that I hope can be resolved in the near future.
John Manley, head of Canadas Council of Chief Executives, said in a Nov. 21 speech in Beijing that China should ease restrictions in sectors such as financial services and mining.
This lack of openness is an obvious source of frustration for Canadian investors, particularly given the recent dramatic increase in Chinese investment in Canada, Manley said. Canadian investors ought to be afforded the same access to China that Chinese investors are afforded.
State Capitalism
China has also faced criticism from the U.S. and the European Union for protecting state-owned enterprises and domestic industry, prompting U.S. Ambassador to China Gary Locke to accuse it last year of embracing state capitalism more strongly each year.
In the Xinhua interview, Harper called on China to follow through on pledges made at the Group of 20 meeting in November to allow its currency to trade more freely.
China committed to move more rapidly toward a market- determined exchange rate system, enhance exchange rate flexibility to reflect underlying fundamentals, and refrain from competitive devaluation of its currency. Harper said. It is important for the credibility of Chinas policy makers and the G-20 that China follows through on its commitments.
Economic ties between China and Canada, which holds the worlds third-largest oil reserves, have been lopsided and meager on investment. Canadian direct investment in China was C$4.8 billion ($4.8 billion) in 2010, less than 1 percent of Canadas total, and about one-third the level of investment in Canada by Chinese firms, Statistics Canada data show. With 99 percent of oil exports going to the U.S., Canadas trade deficit with China was C$147.5 billion from 2006 to 2010, Industry Canada says.
Cooler Ties
Relations between Canada and China cooled in 2006 after Harper criticized Chinas human-rights record, telling reporters that promoting trade shouldnt require the government to sell out important Canadian values. A year later, new foreign investment rules, which put additional scrutiny on state-owned entities, raised questions about whether Canada was targeting China. Harper then chose to skip the 2008 Beijing Olympics.
The relationship began to improve in 2009 with trips to China by Canadian government officials including Finance Minister Jim Flaherty, Bank of Canada Governor Mark Carney and chief bank regulator Julie Dickson, to promote the countrys banks and insurers.
Minority Stakes
Canadian financial institutions have tried to expand in Asias largest economy, with investment mainly limited to joint ventures and minority stakes, such as Bank of Nova Scotias C$719 million purchase of 20 percent of Bank of Guangzhou.
The bank bought a minority stake in Xian City commercial bank with International Finance Corp. in 2004, which grew to 14.8 percent in 2009. At the end of 2011, Scotiabank increased its stake further to 18.1 percent.
It behooves them to try to get in there as the middle class is starting to get a little bit more sophisticated on its savings, said John Aiken, a bank and insurance analyst at Barclays Capital in Toronto. In a perfect world, Im fairly certain that theyd love to go in, set up their own proprietary shop and grow from there but the nature of China, the regulators, they preclude them from doing such.
Harper, who is leading a delegation of more than 40 Canadian executives, will meet Premier Wen Jiabao today in Beijing, hold talks with President Hu Jintao tomorrow and meet local Communist Party officials over the next four days as he seeks to assure Chinese leaders the Asian country is welcome to invest in Canadian natural resources. Harper will also push for greater access to China for Canadian banks, insurers and firms such as Bombardier Inc., a Montreal-based plane and train maker.
Harper will be impressing upon the Chinese government and firms Canadas openness to Chinese investment in our economy, Andrew MacDougall, a spokesman for Harper, said in an interview. He will also seek to expand and deepen the strategic partnership between our two countries, including by discussing opportunities to improve the investment climate for Canadian firms operating in China.
Harper, who last month called diversifying Canadas energy exports a national priority, is seeking to reduce the countrys reliance on the U.S., after President Barack Obama rejected TransCanada Corp.s $7 billion Keystone XL pipeline to ship Canadian oil to the Gulf Coast.
Executives in Delegation
Harpers delegation includes Patrick Daniel, head of Enbridge Inc., the pipeline company that plans to build a link between Albertas oil reserves and the Pacific coast; Tim Gitzel, chief executive of Cameco Corp., the worlds largest uranium producer; Marcel Coutu, chief executive officer of Canadian Oil Sands Ltd., which holds a stake in the Syncrude oil venture along with China Petrochemical Corp.; and executives from Scotiabank and Manulife.
Harper will meet a group of Canadian executives today before seeing Wen at Beijings Great Hall of the People.
Canadian Foreign Affairs Minister John Baird, Natural Resource Minister Joe Oliver, Agriculture Minister Gerry Ritz and Trade Minister Ed Fast are also on the trip.
Harpers Beijing itinerary also includes a meeting tomorrow with Vice Premier Li Keqiang and an address to the Canada-China Business Forum. The Canadian leader flies on Feb. 10 to Guangzhou, capital of Guangdong, the nations most populous province, where hell meet Communist Party Secretary Wang Yang and give the keynote address at a dinner organized by Canadian chambers of commerce in the region.
On Saturday, Harper flies inland to the municipality of Chongqing, where he will meet local Party officials, and visit the citys port and zoo, before departing for Ottawa.
Market Access Issues
As with all partnerships and trading relationships, there are challenges, Harper said in an interview last week with Xinhua, according to a transcript provided by the news agency. There are several market access issues for Canadian companies that I hope can be resolved in the near future.
John Manley, head of Canadas Council of Chief Executives, said in a Nov. 21 speech in Beijing that China should ease restrictions in sectors such as financial services and mining.
This lack of openness is an obvious source of frustration for Canadian investors, particularly given the recent dramatic increase in Chinese investment in Canada, Manley said. Canadian investors ought to be afforded the same access to China that Chinese investors are afforded.
State Capitalism
China has also faced criticism from the U.S. and the European Union for protecting state-owned enterprises and domestic industry, prompting U.S. Ambassador to China Gary Locke to accuse it last year of embracing state capitalism more strongly each year.
In the Xinhua interview, Harper called on China to follow through on pledges made at the Group of 20 meeting in November to allow its currency to trade more freely.
China committed to move more rapidly toward a market- determined exchange rate system, enhance exchange rate flexibility to reflect underlying fundamentals, and refrain from competitive devaluation of its currency. Harper said. It is important for the credibility of Chinas policy makers and the G-20 that China follows through on its commitments.
Economic ties between China and Canada, which holds the worlds third-largest oil reserves, have been lopsided and meager on investment. Canadian direct investment in China was C$4.8 billion ($4.8 billion) in 2010, less than 1 percent of Canadas total, and about one-third the level of investment in Canada by Chinese firms, Statistics Canada data show. With 99 percent of oil exports going to the U.S., Canadas trade deficit with China was C$147.5 billion from 2006 to 2010, Industry Canada says.
Cooler Ties
Relations between Canada and China cooled in 2006 after Harper criticized Chinas human-rights record, telling reporters that promoting trade shouldnt require the government to sell out important Canadian values. A year later, new foreign investment rules, which put additional scrutiny on state-owned entities, raised questions about whether Canada was targeting China. Harper then chose to skip the 2008 Beijing Olympics.
The relationship began to improve in 2009 with trips to China by Canadian government officials including Finance Minister Jim Flaherty, Bank of Canada Governor Mark Carney and chief bank regulator Julie Dickson, to promote the countrys banks and insurers.
Minority Stakes
Canadian financial institutions have tried to expand in Asias largest economy, with investment mainly limited to joint ventures and minority stakes, such as Bank of Nova Scotias C$719 million purchase of 20 percent of Bank of Guangzhou.
The bank bought a minority stake in Xian City commercial bank with International Finance Corp. in 2004, which grew to 14.8 percent in 2009. At the end of 2011, Scotiabank increased its stake further to 18.1 percent.
It behooves them to try to get in there as the middle class is starting to get a little bit more sophisticated on its savings, said John Aiken, a bank and insurance analyst at Barclays Capital in Toronto. In a perfect world, Im fairly certain that theyd love to go in, set up their own proprietary shop and grow from there but the nature of China, the regulators, they preclude them from doing such.
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