Canada's Harper in China visit focused on energy

February 7, 2012 - 2:15 AM

BEIJING (AP) — Canadian Prime Minister Stephen Harper is visiting China to discuss oil sales and other economic ties following U.S. President Barack Obama's rejection of a pipeline carrying Canadian oil across the continental United States.

Harper is due to arrive late Tuesday at the head of a 40-strong delegation of Canadian business leaders. He will meet with President Hu Jintao, Premier Wen Jiabao and other top officials following a welcoming ceremony Wednesday.

The visit highlights efforts by Canada to diversify energy sales. The U.S. market currently absorbs 97 percent of Canadian oil exports.

Chinese state-owned companies have invested more than $16 billion in Canadian energy in the past two years and hope to gain steady supplies to fuel their country's booming economy. Chinese state-controlled Sinopec has a stake in a proposed Canadian pipeline to the Pacific Ocean that would substantially boost Chinese investment in Alberta oil sands.

Overall trade between the sides surged to almost $50 billion in 2011, according to official Chinese figures. Chinese have also increasingly looked to Canada as a destination for tourism and emigration.

Relations between China and Canada have improved significantly since Harper's first trip in 2009, when Wen publicly chided Harper for taking so long to visit. Harper has since altered Canada's hardline stance on human rights to avoid offending China's communist leadership.

Increasing energy exports has been a key theme of Harper's conservative administration. Canada has the world's third-largest oil reserves after Saudi Arabia and Venezuela: more than 170 billion barrels. Daily production of 1.5 million barrels from the oil sands is expected to increase to 3.7 million by 2025, which the oil industry sees as a pressing reason to build the pipelines.

Harper remains determined to build a pipeline to Canada's Pacific Coast after Obama rejected the Keystone XL pipeline, which would have taken oil from Alberta to the Texas Gulf Coast.