Harper signs $2.5 billion in trade deals with China; tensions remain

The prime minister raised concerns about the three-month imprisonment of Canadian coffee shop owners Kevin and Julia Garratt

BEIJING, China – Stephen Harper and Chinese officials signed a flurry of trade and currency deals on Saturday worth as much as $2.5 billion while tensions seemingly lingered between the two countries about the detention of a Canadian couple accused of espionage.

The prime minister raised his concerns about the three-month imprisonment of Kevin and Julia Garratt with Premier Li Keqiang (KUH-chee-yahng) during a closed-door meeting at the ornate Great Hall of the People, a spokesman for Harper said.

Harper didn’t reiterate those concerns publicly when Li, the second most powerful man in China, was asked about the fate of the Garratts during a post-meeting news conference.

“We have discussed a full range of issues in our bilateral relationship in a frank, open and friendly manner,” Harper said in remarks to the media.

Li, meantime, said they “talked about the rule of law and human rights.”

As for the Garratts, the premier added: “As for individual cases, I want to reiterate that as China continues to build a country under the rule of law, I believe that judicial authorities should be able to handle cases in accordance with the law.”

The Garratts have lived and worked in China for 30 years and were running a coffee shop near the North Korean border when they were detained in August on suspicion of spying. They haven’t been charged but have been repeatedly interrogated.

Their son, Simeon, was in China in recent days, timing his visit to Harper’s. He has demanded the Chinese release his parents, but said he hasn’t been able to glean much new information about their plight, nor has he been allowed to visit them.

“If there’s anybody out there that’s going to be able to help my parents, it’s him,” Garratt told CTV, referring to Harper.

The Canadian government hasn’t formally demanded the release of the Garratts.

But the couple’s detention was among a series of irritants between Canada and China that almost scrubbed Harper’s third visit to the country. The Chinese detained the Garratts just days after Canadian officials publicly accused them of cyber-espionage.

At the 11th hour less than two weeks ago, Harper opted to travel to China in a visit that has focused largely on trade and economic issues.

On Friday, the prime minister confessed one of the reasons he travelled to China was simply because Chinese officials “really wanted me to be here” for the APEC summit kicking off Monday.

In keeping with the economic theme of his latest visit, Canada and China signed dozens of commercial deals — including pacts on blueberries, anti-air pollution technology and potash — valued at more than $2 billion on Saturday.

Among the biggest agreements signed includes a deal for Bombardier to sell more than $1 billion in aircraft to China Express Airlines. An Air Canada-Air China joint venture is also valued at more than half a billion dollars.

And a hotly anticipated reciprocal currency deal between Canada and China marks a significant turning point in relations between the two countries, experts said.

The agreement will foster far easier trade between the Canadian dollar and the Chinese yuan, also known as the renminbi. It makes Canada the first country in the Americas to have a deal to trade in the renminbi.

Authorized by China’s central bank, it will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the middle man — in most cases, the U.S. dollar.

Canadian exporters forced to use the American currency to do business in China are faced with higher currency exchange costs and longer waits to close deals.

Jason Henderson, head of global banking for HSBC Canada, lauded the deal.

“China is the second largest economy in the world and is growing faster than any of the world’s large economies, so if Canada is going to maintain the standard of living that we have today, we need to tap into that economy,” he said.

“It’s important for Canada and it’s a great symbol for Harper to have gone to China to strike this deal; it means we support the internationalization of China’s capital markets and recognize its importance to Canada.”

Perrin Beatty, head of the Canadian Chamber of Commerce, agreed, but suggested Canada has been too slow to recognize the importance of the Chinese market.

“The rest of the world is here looking for opportunities to do business and we’re playing catch-up,” he acknowledged on the sidelines of a Canada-China business conference in Beijing where Harper appeared.

“But we can do it …. It’s not too late.”

Harper meets with Chinese President Xi Jinping on Sunday.

Follow Lee-Anne Goodman on Twitter @leeanne25

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