Canadian PM to visit China next week

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By ROB GILLIES, Associated Press

TORONTO (AP) — Canada's prime minister heads to China next week where he'll discuss Canada's vast oil reserves in a visit that's being viewed as an "open warning" to the United States, which rejected a pipeline from Canada to Texas.

Prime Minister Stephen Harper will be in Beijing and two other cities for bilateral meetings with top Chinese officials, including President Hu Jintao and Premier Wen Jiabao, from Feb. 8-11.

Andrew MacDougall, Harper's spokesman, said Friday it is "absolutely in Canada's interests" to move the country's resources to China.

Five Cabinet ministers, including the ministers of natural resources, trade and foreign affairs will make the trip with Harper.

Harper is determined to build a pipeline to Canada's Pacific Coast after U.S. President Barack Obama rejected the Keystone XL pipeline that would have taken oil from Alberta to refineries in Texas.

Ninety-seven percent of Canadian oil exports now go to the U.S and Harper is eager to diversify. Canada is increasingly looking to China, thinking America doesn't want a big-stake share in what environmentalists call "dirty oil," which they say increases greenhouse gas emissions.

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 told Obama he was "profoundly disappointed" that he rejected the Keystone XL pipeline. The pipeline has become a hot topic in the U.S. presidential election. Republican presidential candidates Newt Gingrich and Mitt Romney have both promised to approve the pipeline.

After Obama first delayed a decision on the Keystone pipeline in November, Harper told the Chinese president at the Pacific Rim summit in Hawaii that Canada would like to sell more oil to China, and the Canadian prime minister filled in Obama on what he said.

Wenran Jiang, an energy expert and professor at the University of Alberta, said Canada is using China as leverage.

He said Harper's visit is an explicit warning to the U.S.

"It's a not a subtle warning. It's an open warning," Jiang said. "Harper has said Keystone was a wake-up call."

Jiang said Washington will be paying attention to the trip but he said a number of factors make U.S. officials less worried than a few years ago when China's intentions in Canada's oil sector weren't as clear as they are now.

Jiang said U.S. officials no longer fear that the Chinese are investing in Canada to lock up the supply and ship it back to China. But Jiang said that doesn't prevent Republicans like Gingrich and Romney from raising fears that the U.S. is losing energy security.

David Goldwyn, a former energy official in the Obama administration, has said he sees no threat from Chinese inroads into Canada because there is more than enough oil for all concerned.

China's growing economy is hungry for Canadian oil. Chinese state-owned companies have invested more than $16 billion in Canadian energy in the past two years. State-controlled Sinopec has a stake in Enbridge's proposed Pacific pipeline, and if it is built, Chinese investment in Alberta oil sands is sure to boom.

Zhang Junsai, China's ambassador to Canada, has said Harper's visit will help forge a "win-win" natural resource partnership with Canada to help his country's expanding economy meet its voracious energy needs.

Forty Canadian business leaders will accompany Harper on the trip.

Relations between the countries have improved since Harper's first visit in 2009 when Premier Wen publicly chided Harper for taking so long to visit China. Harper has since changed Canada's hardline stance on human rights.

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