Flaherty makes investment pitch in China

Finance Minister Jim Flaherty is in China pitching Canada's banking system to investment officials in one of the world's most important economies.

"The potential here is enormous," he told CBC News from Beijing, where he is leading a group of officials from Canada's largest banking and insurance firms onCanada's largest trade mission to China in years.

Flaherty said he hopes his visit will spur Chinese investment in Canada's resource and financial service sectors.

"We have a strong economic relationship with China," he said. "But we need to make it grow."

Flaherty's second trip to China as finance minister is meant to court the country's coveted market as exports slow to the United States, Canada's largest trading partner.

There are hopes that China's booming economy can mitigate a U.S. economy that has been battered by a crumbling housing market and battered consumer spending.

"I think, over time, we will see more investment by Chinese businesses in Canada," Flaherty said. "I think, over time, we'll also see growth by our financial institutions in this market, which is just a terrific prospective market for our banks and insurance companies based in Canada that operate globally."

Flaherty has met China's vice-premier, finance minister and the chair of the country's National Development Reform Commission since arriving on the weekend.

Accompanying the finance minister on the trip are Bank of Canada governor Mark Carney and other key government officials and financial executives from Canada's major banks.

Warming relations

Relations between Ottawa and Beijing were seriously strained after the Conservatives took office in 2006 following a series of statements and policy moves that rankled the Chinese.

Tibet's spiritual leader, the Dalai Lama, had been named an honorary Canadian citizen; Canada was actively protesting the imprisonment of Chinese-Canadian Huseyin Celil; and Prime Minister Stephen Harper used strong language in referring to his concern over human rights in China.

But Sino-Canadian relations are improving.

Harper and senior ministers warmly received Chinese Foreign Minister Yang Jiechi during a two-day visit to Ottawa in June.

The Conservatives have dispatched several cabinet ministers to China of late, including Trade Minister Stockwell Day and Foreign Affairs Minister Lawrence Cannon.

The visit also lays the groundwork for Harper's first trip to China later this year. The prime minister, who has not visited China during three years in office, was noticeably absent from last year's Olympic Games in Beijing.

Liberal Leader Michael Ignatieff is also scheduled to visit China next month.