The Canadian business establishment expects Ottawa to soon consummate a deal with Beijing that would foster far easier trade between our dollar and China’s currency.
Official talks toward creation of a Canadian settlement hub for the yuan have been ongoing for months, and have involved multiple meetings between the department of finance and the People’s Bank of China, experts said. The basic structure of a deal, which would likely include initial establishment of a $30-billion swap line, appears to have been worked out, he said.
It’s not clear whether a deal has been formally concluded, and political issues may yet block its completion. But a Bay Street source said Sino-Canadian talks on the matter are going well and there has been no word of anything that would stop a deal being reached.
China has invited Prime Minister Stephen Harper to a bilateral meeting with its top leadership in the days before an Asia-Pacific Economic Co-operation summit scheduled for Nov. 10-11. Harper has confirmed his attendance at the summit, but not yet at the bilateral meeting, amid continuing uncertainty over the fate of two Canadians still detained on suspicion of stealing Chinese military and defence research secrets.
If Harper declines the invitation, it would be considered a snub and damage relations with China, observers have warned. That could in turn affect what is largely a political decision on whether China will allow Canadian banks new abilities to trade its currency.
Despite the uncertainty over the Harper visit, advance teams from Ottawa have flown to Beijing to begin planning a Harper visit, and Canadian diplomats say a ceremonial signing on a yuan hub would be a key "deliverable" for the prime minister to announce – if a deal can be reached.
The announcement could be as simple as an agreement in principle to move forward on the hub, or something more substantial with more of the details worked out.
