Canada and China have signed a reciprocal currency deal that's expected to dramatically boost exports.
The hub 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.
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The signing of the deal was announced in Beijing today by Premier Li Keqiang and Prime Minister Stephen Harper.
"It's a great boon for the Canadian business community, both importers and exporters, because they can now do business in China with the currency and not have to go through multiple financial exchange transactions," Stewart Beck, president and CEO of the Asia Pacific Foundation of Canada, told CBC News.
"So the pundits are saying it could double maybe even triple the level of Canadian trade between Canada and China," he said.
Authorized by China's central bank, the deal 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.
"It's something the prime minister has been talking about. He wants Canadian companies, particularly small- and medium-sized businesses, doing more and more work in China, selling goods and services there," said CBC's Catherine Cullen, reporting from Beijing.
Jason Henderson, head of global banking for HSBC Canada, calls the deal great news for Canada, given that China is the second largest economy in the world after the U.S.
If Canada is to maintain the standard of living that it enjoys today, he adds, it needs to tap into the Chinese market. The currency deal is the first step on that path.
PM discusses Canadians held in China
The prime minister raised his concerns about the three-month imprisonment of Kevin and Julia Garratt with Premier Li 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.
Harper's trip to China, his third official visit, has largely focused on trade and economic issues.
During meetings Saturday, Canada and China signed more than 20 commercial deals, valued at more than $1 billion.
Bombardier to sell China aircraft
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.
The Prime Minister's Office said in a statement the deals "are a testament to the significant growth taking place in the bilateral commercial relationship."
"Several sectors stand to benefit from these agreements, including sustainable technologies, aerospace, transportation, construction, mining, energy, infrastructure, agri-food, and information and communications technologies sectors," the statement said.
It said trade between Canada and China supports more than 470,000 jobs in Canada a year, which was about 2.67 per cent of total Canadian jobs in 2013.
A look at some of the other agreements and initiatives announced during Stephen Harper's visit to China:
- Foreign Affairs Ministers Dialogue and an Economic and Financial Strategic Dialogue: This agreement is designed to enhance bilateral communication and co-operation in the areas of foreign affairs and economic and financial matters.
- Memorandum of Understanding on Nuclear Co-operation: Expansion of this agreement will help the Canadian nuclear industry increase its exports to China and generate jobs and growth in Canada's nuclear energy sector.
- Air Travel: An updated Canada-China Air Transport Agreement allows airlines from both countries to offer more travel options for goods, services and people.
- Transit Without Visa Program: Expansion of the Transit Without Visa Program and the China Transit Program adds China Southern Airlines to both programs. Travellers from the Philippines, Indonesia, Thailand and Taiwan who normally require a visa to come to Canada are allowed to transit without a visa if they are travelling through Canada en route to or from the U.S.
- Health sector: Both countries will co-operate more closely in several health-related areas, including joint research efforts on infectious disease prevention and control, chronic disease, traditional Chinese medicine, food safety, health innovation as well as health emergency preparedness and response.
- Cherries: This agreement marks the normalization of cherry exports from B.C. to China, valued by the industry at $20 million annually. The two sides also agreed to sign a arrangement of intent to develop mutually agreeable conditions for export of fresh blueberries to China.
With files from CBC's Catherine Cullen