Canada businesses impatient for China growth as Harper promotes trade

By Andrea Hopkins HANGZHOU China (Reuters) - Canadian Prime Minister Stephen Harper kicked off a visit to China on Friday facing criticism that the troubled diplomatic relationship between the two nations has hampered trade, but promptly raised concern about human rights during the mostly business portion of his trip. Harper, on his first visit to China in two years, announced the opening of four new trade offices in the cities of Hangzhou, Xian, Xiamen and Tianjin to help the entry of Canadian businesses into the fastest growing regions of China. But he then raised the issue of religious freedom when he met Zhejiang province party chief Xia Baolong, putting human rights on the agenda even as executives urged him to focus on improving trade and investment ties during his first visit in two years. "He indicated that Canadians would be concerned to know that religious freedoms were being restricted. Beyond that it was a private conversation, but the issue was raised," spokesman Jason MacDonald said of the meeting with Xia, which followed Harper's remarks to a business conference. Dozens of churches in the wealthy province of Zhejiang received government notices this year demanding the demolition of church buildings or removal of crosses in what the government says is a campaign aimed at illegal structures, the U.S.-based Christian group ChinaAid says. Rights groups frequently accuse China of not respecting freedom of religion, charges it denies. Since taking power in early 2006, Canada's right-leaning Conservatives have adopted an inconsistent policy on China, reflecting splits between pro-business members and social conservatives who are suspicious of Beijing. As Harper kicked off a conference bringing together Chinese and Canadian executives looking to do business, some Canadian executives said political and economic irritants between the two countries have made it hard to keep pace with competitors in other countries. "Any time there are those geopolitical things that are beyond the control of the businessman ... it slows things down big time," said David Curtis, president and CEO of Viking Air Ltd, a British Columbia-based company that makes small seaplanes. He said other nations appear to understand that government-to-government interaction is especially important in China, while Canada neglects the relationship. "You can bet our colleagues to the south in the United States, in France, in Brazil, their political leaders - whether mayors or the prime minister or the president - are talking aerospace, and it is so important. We need to have our products front and center, and the politicians talking about it," he said. PROBLEMS China is Canada's second-largest trading partner after the United States. In 2013, two-way merchandise trade between the countries reached C$73.2 billion ($64 billion), accounting for 7.7 per cent of Canada's total merchandise trade. Canadian Trade Minister Ed Fast, who has accompanied Harper on the visit, said Canadian businesses were partly to blame for their slow progress into China. "Canadians tend to be quite cautious, we tend to be risk-averse. It takes quite something to push Canadian companies over the line to look at markets beyond North America, and it is my role as trade minister to do that," Fast told the business delegates at the conference in eastern Chinese city of Hangzhou. Relations between Ottawa and Beijing soured dramatically in July after Canada accused Chinese hackers of breaking into a key computer network, the first time it has ever singled out China for such a security breach. Beijing dismissed the accusation as "irresponsible". Less than a week later, Chinese authorities detained an expatriate Canadian couple, Kevin and Julia Garratt, for suspected theft of military and intelligence information and for threatening national security. The couple, long time residents of China, operated a coffee shop near the North Korean border. Another Canadian executive taking part in the bilateral meetings said Canada should stay out of Chinese politics. "I think (problems) can get blown out of proportion. They can be easily fixed if people are talking, they are not easily fixed if you don't talk," said Guy Nelson, chief executive at Empire Industries Ltd, a Toronto-based maker of amusement park rides, among other mechanical and structural installations. Nelson sees China as a huge opportunity for his company, noting theme parks planned by Walt Disney Co and Universal Studios in China, but said bumpy relations between the two countries hurt business. "Canada has to not try to impose our values excessively on this country," he told reporters on the sidelines of the business conference. "How China chooses to run its country is their business. We can as friends advise from time to time, but you can't advise your friends if you're not talking. So it is better to be engaged." (1 US dollar = 1.1439 Canadian dollar) (Additional reporting by Ben Blanchard in Beijing; Editing Robert Birsel)