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Stephen Harper's China Visit Focused On Energy

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Canada's Prime Minister Stephen Harper (L) and his wife Laureen wave as they disembark from their aircraft after arriving at Beijing international airport on February 7,2012. While in China, Harper will meet with Chinese President Hu Jintao and Chinese Premier Wen Jiabao. AFP PHOTO / ED JONES (Photo credit should read Ed Jones/AFP/Getty Images) | Getty

BEIJING (AP) — Canada's prime minister is visiting China to discuss oil sales and other economic ties following President Barack Obama's rejection of a pipeline carrying Canadian oil across the continental United States.

Prime Minister Stephen Harper arrived late Tuesday, heading a 40-strong delegation of Canadian business leaders. He will meet with President Hu Jintao, Premier Wen Jiabao and other top Chinese officials following a welcoming ceremony Wednesday.

The visit highlights efforts by Canada to diversify energy sales. The U.S. market currently absorbs 97 percent of Canadian oil exports.

Chinese state-owned companies have invested more than $16 billion in Canadian energy in the past two years and hope to gain steady supplies to fuel their country's booming economy. Chinese state-controlled Sinopec has a stake in a proposed Canadian pipeline to the Pacific Ocean that would substantially boost Chinese investment in Alberta oil sands.

Overall trade between the sides surged to almost $50 billion in 2011, according to official Chinese figures. Chinese have also increasingly looked to Canada as a destination for tourism and emigration.

Relations between China and Canada have improved significantly since Harper's first trip in 2009, when Wen publicly chided Harper for taking so long to visit. Harper has since altered Canada's hardline stance on human rights to avoid offending China's communist leadership.

Increasing energy exports has been a key theme of Harper's conservative administration. Canada has the world's third-largest oil reserves — more than 170 billion barrels — after Saudi Arabia and Venezuela. 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 remains determined to build a pipeline to Canada's Pacific Coast after Obama rejected the Keystone XL pipeline, which would have taken oil from Alberta to the Texas Gulf Coast.

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