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International affairs minister John Baird pledged Oct. 16, 2013 that Ottawa will place into force a long-promised investment deal with China ‘in short order’.Jason Lee/Reuters

Amid criticism that its complicated relationship with China needs "emergency" attention, Ottawa will place into force a long-promised investment deal "in short order," international affairs minister John Baird pledged Wednesday.

Canada signed a foreign investment promotion and protection agreement with China last September, a deal intended to provide a new layer of legal shielding for companies operating between the two countries. But it has yet to ratify the deal, which has since become the target of anger at home, where some see it as handing Chinese state-owned enterprises powerful leverage over Canadian legislative authority.

At the same time, the long wait for ratification has provoked concern among Chinese diplomats and Canadian companies, who see the deal as an important step to mending fractures with China still present after a period of neglect during the early years of the Harper government. Talks toward such a deal date back to 1994.

Now, Mr. Baird says it is coming soon.

Ottawa looks "forward to bringing it into force in short order," he told the annual general meeting of the Canada-China Business Council in Beijing.

He also used the occasion to call for China to reciprocate by opening more of its economy to Canadian companies.

"Many Canadian companies feel that we don't yet have a fully level playing field in this important relationship," he said. "The government of Canada shares that view," and wants Canadian "businesses to be treated in the same way in China as Chinese firms are treated when doing business in our country."

Yet in some corners of the Chinese business establishment, it is Canada that deserves blame for fouling the waters. The $15.1-billion (U.S.) CNOOC Ltd. takeover of Nexen Inc. was accompanied by new handcuffs on state-owned companies, whose ability to do big deals, particularly in the oil sands, now appears to be limited. That has brought warnings, including most recently from former Cabinet minister Jim Prentice, that Canada is freezing out an important flow of money.

The situation is serious enough that despite a diplomatic China offensive that has seen a passel of senior ministers – and, this week, the Governor General and National Arts Centre orchestra – travel to Beijing, Canada faces the real possibility of worsening ties with China, a senior banking official warned Wednesday.

"At present the Chinese investment in Canada has met with a lot of barriers and obstacles and challenges," said Jiang Daozhen, the vice general manager of the Beijing branch for the China Development Bank. He also directs the bank's Canada Business Team.

Without change, investment between the two countries is at risk of stagnation, he said, pointing to China's work to buy key commodities like energy from central Asia, rather than Canada. "We only have a window of five to 10 years. If we cannot grasp the opportunity, the situation will get worse. And the probability of this is very high unless we change our current practices," he said.

He added: "You need to have a sense of emergency."

Another factor: China, observers believe, is moving toward opening greater parts of its economy to foreign companies. Yu Bin, director general of the Development and Research Center of the State Council – effectively China's Cabinet – expressed hope that coming reforms, expected to be discussed at an important November plenary session, will create a "larger space" for the private sector to operate, paring back the roles of state companies.

Other changes are also under discussion. In China today, foreign and domestic companies are treated differently. "Reform should focus on creating a level playing field for all businesses of different ownership," Mr. Yu said.

The Chinese government recently established a free-trade zone in parts of Shanghai to experiment with a freer market. Few expect radical change in November, however.

Many Canadians, meanwhile, remain hopeful that sunnier days are ahead with China. Quebec has opened five trade offices in China, where it offers companies office space, computers and secretarial services in hopes they can build business with China. The province is also working to encourage direct air service between Montreal and Beijing.

"I'm very optimistic about the relationship," said former Quebec premier Jean Charest, who is now a partner with McCarthy Tetrault LLP. Recent trade numbers, he said, "are going in the right direction," although those gained a major one-time boost last year with the Nexen deal, the biggest ever Chinese foreign takeover.

And there is little doubt that Canadian politicians, if nothing else, are talking a sweet – some might say even sappy – game in their efforts to undo earlier criticisms of China on human rights grounds.

"It's no secret that I love this country," Mr. Baird said Wednesday, with China's Ambassador to Canada and several high-level executives sitting in the audience. "I love this country, I love its people, I love its culture, its history. I love its food and I love visiting here."