China Perspective

Chinese VP wants trade deal with Oz

(China Daily)
Updated: 2010-06-22 08:25

Chinese Vice-President Xi Jinping chats with Australian Prime Minister Kevin Rudd at Parliament House, June 21, 2010. [Agencies]

CANBERRA, Australia - China is keen to strike a free trade pact with Australia soon and opposes any return to protectionism in response to the global economic crisis, China's vice-president said Monday.

Xi Jinping is on the final leg of a four-nation tour that also took him to Bangladesh, Laos and New Zealand.

His visit to Australia has focused on its burgeoning exports of iron ore, coal and natural gas that feed the voracious appetite of Chinese manufacturing.

Xi told government and business leaders at a lunch at Parliament House that Australia and its biggest export customer, China, had strategic interests in completing bilateral free trade talks, which began in 2005 and will enter a 15th round in Beijing this month.

"A comprehensive, balanced, high quality and mutually beneficial free trade agreement between Australia and China serves the fundamental and long-term interests of our two countries," Xi said.

"We hope that the two sides will ... reach a mutually acceptable agreement at an early date."

During talks with Australian Prime Minister Kevin Rudd, Xi said the bilateral comprehensive cooperative relationship has set "an example" for countries with different political systems, cultural traditions and development stages to seek a harmonious relationship and common development.

Xi said China and Australia also had to take "concrete actions" to oppose trade and investment protectionism in the aftermath of the global recession.

"Given the continuing impact of the international financial crisis, it remains a daunting task to promote the comprehensive recovery and sustainable development of the world economy," Xi said.

China has been quick to fill a slump in investment in the Australian resource sector since the global downturn. But Australia is cautious about allowing Beijing-controlled companies to buy the mines that are commanding record prices for resources because of Chinese demand.

Beijing has also long complained to Canberra about the escalating prices Chinese manufacturers are being charged for Australian raw materials during the mining boom. Canberra refuses to stop free market forces driving up prices for commodities such as iron ore and coal.

Currently, Australia is the biggest exporter of iron ore, alumina, coal and liquefied natural gas to China, and it is also the biggest supplier of wheat, sheep wool and live cows for China.

China is Austria's biggest trading partner, biggest export market and biggest importer. Despite the global financial crisis, Australia's export to China rose by 31 percent in 2009.

Prime Minister Kevin Rudd plans to introduce a tax on mineral profits that is expected to raise an extra 9 billion Australian dollars ($8 billion) a year from mining companies. Critics argue the move would deter investment and kill the mining boom.

During Xi's visit on Monday, 10 agreements were signed, most related to the resources and energy sectors.

Xi is the most senior Chinese official to visit Australia since the relationship was tested when an Australian mining executive was sentenced in March to 10 years in prison for industrial espionage.