Australia and China signed more than A$10 billion (US$8.8 billion) in new accords, expanding their energy and resources trade ties, Australian Prime Minister Kevin Rudd said during a six-day visit by Chinese Vice President Xi Jinping (習近平).
“Our relationship stretches back a long time, but we have a strong future as well,” Rudd told an audience of 600 people at the Australia-China Economic and Trade Cooperation Forum in Canberra after holding talks with Xi, a likely successor to President Hu Jintao (胡錦濤).
China is Australia’s largest trading partner, with annual two-way commerce reaching A$85.1 billion last year, up 15.1 percent from a year earlier, and comprising almost 17 percent of Australia’s total trade, according to the Australian Department of Foreign Affairs and Trade Web site. Iron ore makes up half of the exports.
The accords include an engineering and procurement agreement between Fortescue Metals Group Ltd and China Gezhouba Group Co (中國葛洲壩集團) announced by the iron ore miner earlier yesterday and a US$1.2 billion agreement between Karara Mining Ltd and China Development Bank Corp (國家開發銀行) for rail and port construction in Oakajee, Western Australia.
The development bank also reached an agreement with Aquila Resources Ltd to expand coal and iron ore projects in the Pilbara in Western Australia.
The accords include Telstra Corp, Australia’s largest phone company, becoming the preferred supplier to ZTE Corp (中興通訊) and an US$8 billion coal project near Bowen in Queensland state that Rudd said would create A$4 billion in exports every year for 25 years.
The agreements were signed as Rudd fights for voter support for his proposed 40 percent levy on resource “super profits.” The levy, set to take effect from 2012 if Rudd wins a national election due by April, is opposed by companies like BHP Billiton Ltd and Rio Tinto Group, which say it would limit investment and jobs growth.
Chinese investment, particularly in the resources industry, is also increasing with the Australian government approving more than 160 proposals since November 2007. Total investment was about A$60 billion as of last month.
“Our economic relationship with China is becoming so much more than just trade in resources,” Australian Trade Minister Simon Crean said yesterday. “The upwards trajectory shows no signs of slowing and this year two-way trade may well exceed A$100 billion.”
Xi’s visit follows tension after China rejected Rudd’s criticism of the secretive handling of industrial espionage charges in March against four Rio executives, including Australian iron ore official Stern Hu (胡士泰), who received sentences of between seven and 14 years.
Rudd said at the time China “missed an opportunity” to be transparent and give companies more confidence by trying parts of the case behind closed doors.
The two countries have “different societies, different systems as well as some differences of view,” Australian Foreign Minister Stephen Smith told a forum in Canberra.
“Australia is committed to managing these in a straightforward and constructive way through frank exchange and dialogue,” Smith said.
The two countries established diplomatic ties in 1972.
Australia is yet to sign a free trade pact with China, after the countries agreed in April 2005 to begin negotiations under former prime minister John Howard.
New Zealand clinched a free trade deal in 2008 and China has since overtaken the US and Japan to become New Zealand’s second-largest trading partner behind Australia, Trade Minister Tim Groser said on Thursday.
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