'Shelving differences' is the way to do business, Canada told

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Endorsing Prime Minister Stephen Harper's new approach to dealing with the Middle Kingdom, the man slated to become China's next leader encouraged Canada to "shelve" political differences while accelerating economic ties and energy sales.

Vice-Premier Li Keqiang, who is widely expected to succeed Premier Wen Jiabao in a power transfer that will begin later this year, said "never before has China-Canada business co-operation been so deep based and wide ranging" and added there was still "a long way to go" before the relationship achieved its potential, particularly when it comes to energy.

"Canada is one of the countries with deep energy and resource reserves," he told Canadian and Chinese business executives who gathered in a hotel ballroom on the edge of Tiananmen Square. Meanwhile, Mr. Li said "China is facing mounting resource and environment pressure."

It was the first time a member of China's incoming generation of leaders has spoken about the relationship between Beijing and Ottawa. Mr. Li is expected to be promoted to a more powerful position in a Politburo shuffle this fall and eventually take over as premier next spring under Vice-President Xi Jinping, who is expected to become president.

On the political side, Mr. Li said the two sides should focus on "seeking common ground while shelving differences."

The statement could be interpreted as a signal that Canada mute its criticism of China's human-rights record and policies toward Tibet.

Following a series of gestures early in his tenure as Prime Minister that Beijing perceived as hostile – such as hosting Tibet's spiritual leader, the Dalai Lama – Mr. Harper has stepped up engagement with the Communist Party leadership on the economic file.

Despite its emergence as an economic, military and diplomatic superpower, Beijing remains highly sensitive to criticism. On Thursday, the official Xinhua newswire published an angry attack on unnamed Western governments that it said had "viciously distorted" China's decision to veto a United Nations Security Council resolution condemning Syria for its violent crackdown on a popular uprising there.

The editorial came one day after Mr. Harper told Mr. Wen "in very clear and strong terms" that Canada was concerned by China's decision to stand with Russia in protecting Syrian dictator Bashar Assad.

There was no such sniping yesterday, only a raft of newly signed business agreements and the talk of more. "In China, if the leadership has a relationship at the top levels, it trickles down," said Peter Kruyt, chairman of the Canada-China Business Council. "We hear it in every meeting we go to – that relations are good, now, with Canada, and it allows us to do business."

Mr. Li and Mr. Harper each spoke after witnessing the signing of 23 economic agreements that the Prime Minister's Office said were worth "close to $3-billion." The official China Daily newspaper suggested taking the relationship many steps further, quoting Mr. Wen as proposing a full-blown free-trade agreement during his meeting with Mr. Harper on Wednesday. However, Canadian officials were quick to pour cold water on the idea.

Mr. Harper made no secret of the fact that – trade deals aside – a big part of his agenda here is engaging the next generation of the Chinese leadership, of which Mr. Li is almost certain to be a central part.

"In the long run, it is these personal connections that will define our relationship," Mr. Harper said in his own speech, saying that the two men had a "cordial introductory meeting – the first, I hope, of many to come."

After two days of meetings in Beijing, Mr. Harper heads now to the southern cities of Guangzhou and Chongqing, where he will meet local party bosses Wang Yang and Bo Xilai, seen as leading contenders to be promoted to the all-powerful Standing Committee of the Politburo during a once-in-a-decade leadership shuffle this fall.

Bilateral trade has tripled since 2001 to just under $60-billion in 2010, making China Canada's second-largest trading partner.

That number represents less than 10 per cent of the $645.7-billion in commerce between Canada and the United States in the same year.

Chinese investment in Canada totalled $14-billion in 2010, versus $5-billion the other way.

Among the deals signed was a pact that will give Canadian uranium producers more access to China's civilian nuclear power industry. No details of the agreement were provided, but Canada is home to the world's largest uranium producer, Cameco Corp.

"This is all about natural resources," said Howard Balloch, a former Canadian ambassador to China, speaking broadly about of Mr. Harper's five-day trip to China.

Mr. Balloch now sits on the board of directors of Canaccord Financial Inc., which announced Thursday that it plans to establish a $1-billion fund with the Import-Export Bank of China "focused specifically on investing in the Canadian resource sector."

However, an investment agreement that Mr. Harper built up Wednesday as a key achievement of his trip seemed to be less certain than Canadian officials have let on. The joint statement issued by Mr. Harper and Mr. Li at the end of their meeting said only the two sides had reached "the conclusion of the substantive negotiations" on a Foreign Investment Promotion and Protection Agreement. But a final deal doesn't seem to be ready yet.

"Both sides … will work to finalize the text within their respective domestic processes," the joint statement reads, a rather large caveat that Mr. Harper did not mention when he announced the tentative agreement on Wednesday, hailing it as the end of 18 years of negotiations.

Canadian Trade Minister Ed Fast says the pact, when implemented, will create a neutral arbitration mechanism that Canadian companies can appeal to if they feel unfairly treated in the world's largest market. However, details of the agreement won't be made public until after legal reviews in both Canada and China, a process that could take months – or even trigger more negotiations.

The two governments also confirmed a highly symbolic deal that will see two giant pandas lent to the Toronto and Calgary zoos – a centuries-old gesture of Chinese goodwill toward a foreign partner – with the pair expected to spend five years in each city. No cost was announced, but past deals involving Chinese pandas have seen hundreds of thousands of dollars going to the Chinese side to help fund panda conservation efforts in their native Sichuan province.