Finance Minister François-Philippe Champagne celebrated China’s decision to issue hundreds of millions of yuan-denominated sovereign green bonds in Canada as he wrapped up a meeting in Vancouver with a member of Beijing’s top leadership Monday.

The two officials discussed trade and investment ahead of an expected meeting next week between Prime Minister Mark Carney and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in Shenzhen.

Canada and China signed an agreement Monday to deepen financial sector co-operation after talks that the Finance Minister said included discussion of banking licenses and the possibility of Chinese financial institutions expanding in this country.

Mr. Champagne, speaking at the end of the two-day meeting with He Lifeng, Vice Premier of the People’s Republic of China, cited the Chinese bond issuance, announced late last week, as proof that Ottawa and Beijing are making headway in restoring economic ties.

Mr. He, one of China’s most senior economic officials, is also Beijing’s lead negotiator on trade with the United States.

The Ottawa-Beijing relationship is still recovering from a deep freeze lasting more than seven years after China jailed two Canadians in 2018, in what a Canadian cabinet minister once called hostage diplomacy.

China sells sovereign green bonds in Canada

“I would say we’ve made great progress,” Mr. Champagne told reporters, adding later, “the commitment of the Chinese government to raise funds here in Canada for green bonds is a good signal.”

China’s finance ministry said in a Nov. 5 statement it would issue up to 4 billion yuan, or roughly $845-million, in green sovereign bonds in Canada.

Under China’s sovereign green bond framework, proceeds are to be used for eligible green spending in the country’s central budget, including for clean transportation, water management and pollution control.

John Fragos, press secretary for Mr. Champagne, said this is the Chinese ministry’s first offshore issuance of yuan-denominated bonds beyond London, Hong Kong and Macau.

The Finance Minister said Canada-China co-operation appears to be pleasing investors. “I was told this morning that it was more than 10 times oversubscribed,” Mr. Champagne said of the bonds.

Guy Saint-Jacques, a former Canadian ambassador to China, said Beijing is always looking for opportunities to internationalize the use of its currency and reduce dependence on the U.S. dollar. “This is totally in line with what China is doing to try to increase the use of renminbi,” he said of the green bond issue in Canada.

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The meeting in Vancouver, called the Canada-China Economic and Financial Strategic Dialogue, wrapped up without any news from Mr. Champagne about whether Canada will reactivate its membership in the China-led Asian Infrastructure Investment Bank. More than three years ago, Ottawa suspended participation, another high-profile diplomatic rupture with Beijing.

Canada’s frozen membership in the bank remains unresolved despite Mr. Carney’s efforts to restore ties with Beijing.

But in a joint statement, Mr. Champagne, International Trade Minister Maninder Sidhu and Mr. He committed to deepening co-operation in multilateral development, the bank’s reason for existing.

A “joint fact sheet” statement said both countries “agreed to deepening cooperation under multilateral mechanisms including the G20 and APEC, and within the frameworks of international financial institutions, including multilateral development banks, to improve global economic governance.”

Mr. Champagne said the meeting did not directly touch on Canada’s agreement to allow low-tariff imports of 49,000 Chinese-made electric vehicles over a 12-month period ending Feb. 28. Only slightly more than 16,200 Chinese-made EVs had entered Canada as of the end of October under the deal, which was struck between Ottawa and Beijing earlier this year.

Beijing in turn agreed to scale back retaliatory tariffs on Canadian canola seed, among other products.

The Finance Minister said the meeting included talk of energy storage technology, where Chinese companies have expertise. He said there is a match to be found between “a country like Canada, which is doubling its electricity capacity and at the same time a country like China, which can provide scale and certainly support our ambition.”

China extends tariff relief for some Canadian farm, seafood products by two years

Mr. Carney has said Chinese investment would be unwelcome in several areas, including defence, critical minerals and artificial intelligence.

Mr. Champagne, however, said despite these “guardrails,” there are many areas left for China, including energy and agriculture.

He said the talks Sunday and Monday are helping provide a “road map of the things we want to accomplish” that will be useful for Mr. Carney and Mr. Xi when they meet at APEC.

Mr. Champagne said talks included the financial sector, energy, food, forestry and technology.

Last week, China extended significant tariff reductions on Canadian lobster, crabs, peas and canola meal for another two years. The announcement removed a cloud of uncertainty that had been hanging over Canada’s agriculture and seafood sector. The tariff reductions, once set to expire on Dec. 31, have been extended to the end of 2028.

In return for this tariff relief, Canada agreed to extend until the end of 2028 remission measures for some Chinese steel and aluminum products. Starting in 2025, Ottawa began offering remission, or refunds, on Canadian tariffs for a number of types of Chinese steel that Canada doesn’t produce domestically.