PM Harper visiting China
Economic, security and the fate of a currency trading center are expected to dominate scheduled talks between Canadian Prime Minster Stephen Harper and Chinese President Xi Jinping.
Harper, who left for China on Nov 5, is in China for a five-day trip, according to a press release from the office of the prime minister. The first two days he led a Canadian business delegation to Hangzhou, Zhejiang province before traveling to Beijing and the meeting with Xi. Later he is set to attend the opening session of the Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting on Nov 10 in the Chinese capital.
Harper will leave early to return to Ottawa in time for Tuesday’s Remembrance Day ceremonies at the National War Memorial.
The Prime Minister’s trip to China — his third since taking office — is an opportunity to strengthen the longstanding ties between Canada and China and set the direction for Canada’s future endeavours with the country, said the press release.
There is speculation that the trip may produce an announcement that Toronto has been selected as the first North American offshore clearing and settlement center for the Chinese renminibi or yuan. Vancouver and Toronto have been competing to become a primary trading center for the Chinese currency.
Hong Kong, Taipei, and Singapore are currency hubs. London and Frankfurt will soon join them after agreements between the central banks of China, Germany and the UK were announced earlier this year. Advantages of becoming a clearing and settlement center include reducing currency exchange costs for Canadian companies. They could convert Canadian dollars directly into yuan instead of having to pay fees to first convert the funds into US dollars. The currency hub is also expected to generate jobs and increase foreign trade and investment in the city that is selected.
“This would be very important for Canada as there are costs Canadian businesses incur in exchanging currencies. Toronto is our banking center and one of the leading financial centers of the world so it would be a logical location for the center,” said Gordon Houlden, director of the China Institute at the University of Alberta in an interview.
Trade and investment concerns are also likely to be addressed in the Harper-Xi talks.
“Canada would like better access to the Chinese market to address the 3 to 1 trade imbalance between the countries. China would also like more assurances that Chinese State firms will have major investments in Canadian natural resources and infrastructure reviewed and approved by the Canadian government in a timely fashion,” said Charles Burton, a former Canadian diplomat who served in China and is now a professor at Brock University in St. Catharines, Ontario.
“Canada has received large investments from the Chinese in the energy sector and I think the investments will continue as China needs to diversify its energy sources,” Houlden said.
“I’m a believer that personal relationships are important and the fact that the prime minister and the Chinese president will be seen together will send a powerful signal. And that the meeting will come on the eve of the APEC summit will also help convey additional significance,” added Houlden.