Spying case heightens tensions between China and Canada

China's decision to investigate two Canadians for suspected spying highlights a sharp and unexpected deterioration in bilateral ties just months ahead of a trip by Canada's prime minister Stephen Harper to Beijing.

The detention of the couple, long-time residents in China who ran a coffee shop on the border with North Korea, could also make life tougher for the small group of Canadian government ministers who favour closer economic links with Beijing.

Chinese authorities are investigating the couple - Kevin Garratt and his wife Julia Dawn Garratt - for suspected theft of military and intelligence information and for threatening national security.

The detention came less than a week after Canada accused Chinese hackers of breaking into a key computer network, the first time it has ever singled out China for such a security breach. Beijing dismissed the allegations as "irresponsible."

The two incidents look set to overshadow a visit by Mr Harper to Beijing in November for a regional summit which could include a first meeting with China’s president Xi Jinping.

Since taking power in early 2006, Canada’s right-leaning Conservatives have adopted an inconsistent policy on China, reflecting splits between pro-business members and social conservatives who are suspicious of Beijing.

“There is a deep division within caucus and within cabinet on how to respond ... there is a clear battle,” said Paul Evans, a professor at the University of British Columbia and one of Canada’s leading experts on China.

Mr Evans said attempts by the cabinet to agree on a China strategy had failed in recent years.

An official in Mr Harper’s office declined to comment, saying merely that “we have a frank and mature dialogue on a variety of levels with the Chinese”.

Reuters