China, Australia establish strategic talks

China and Australia had the first of their planned annual meetings between premiers on Tuesday and agreed to set up a Strategic Economic Dialogue as well as another dialogue focusing on diplomacy and strategy.

Premier Li Keqiang met with his Australian counterpart Julia Gillard in the Great Hall of the People in Beijing.

Premier Li Keqiang chats with his Australian counterpart Julia Gillard at a ceremony for the signing of agreements in Beijing on Tuesday. Feng Yongbin / China Daily

Beijing and Canberra also announced that the Australian dollar will become the third major currency to have direct convertibility with the yuan, after the US dollar and the Japanese yen.

Gillard's five-day visit to China, shortly after the new Chinese leadership took office, shows that Australia, which defines itself as an Asian country, has fully realized the importance of China, experts said.

The two leaders talked casually in English while they waited for the welcoming ceremony and during the signing ceremony.

"He is an outgoing person to talk to and has a sense of humor, I think. In Australian style, we enjoy that. We had warm conversations rather than old formalities. I did get a sense of warmth and engagement with him," Gillard said of Li when talking to reporters after the meeting.

At the meeting, the two nations agreed to accelerate negotiations on the China-Australia free trade agreement, according to a statement from the Foreign Ministry.

The leaders agreed to strengthen defense exchanges and have better cooperation in multilateral affairs.

They also planned to push for cooperation in areas from mining and agriculture to infrastructure construction and tourism, and vowed to support young people to learn in each other's country.

There are around 150,000 Chinese students studying in Australia. Mandarin is the second most common spoken language in Australia, after English. The Chinese community in Australia numbers more than 900,000.

China is Australia's largest trade partner while Australia is China's seventh-largest trade partner. Bilateral trade hit $122.3 billion in 2012, up 4.9 percent year-on-year after a surge of 32.1 percent in 2011, according to the General Administration of Customs.

"There are conditions, and (more important) there are demands, to deepen China-Australia cooperation," Li said.

He called for the two sides to "direct the efforts toward the same goal".

Gillard said her country wants to deepen mutual trust with China.

Gillard arrived in Hainan province on April 5 to attend the Boao Forum for Asia Annual Conference.

She told President Xi Jinping when they met on Sunday in Hainan that Australia wants to be a reliable and stable resource provider for China.

Su Hao, a professor at China Foreign Affairs University, said the importance Gillard attaches to Beijing shows that "Australia is actively clearing up the obstacles in its relations with China".

Su said that although Canberra has cooperated with Washington's pivot shift to the Asia-Pacific region, it has defined itself as an Asian country while realizing that China is an important nation in Asia.

Gao Cheng, a researcher from the National Institute of International Strategy at the Chinese Academy of Social Sciences, said China-Australia trade will expand due to their complementary economies.

"It's sure bilateral trade will keep expanding as China will demand more natural resources from Australia in the future. Meanwhile, Australia is eager to tap the huge Chinese market and benefit from China's fast economic growth," she said.

"Gillard's high-profile visit and the direct trading of the two currencies are positive signs of improving political bilateral ties," Gao said.

Pu Zhendong contributed to this story.