Gillard scores coup with China agreement

Australia and China have formally committed to annual leadership talks, giving Canberra greater access than the superpower has granted virtually any other Western nation.

With countries across the world clamouring for the ear of the world's second largest economy, Prime Minister Julia Gillard has landed the foreign policy triumph of her leadership, agreeing to a strategic partnership with her Chinese counterpart, Premier and Prime Minister, Li Keqiang.

Under the agreement, annual meetings will take place between the prime ministers of the governments, an arrangement that exists as a formal process between China and only three other countries - Britain, Germany and Russia - as well as with the European Union.

Its formal completion follows intense behind-the-scenes negotiations and came on the last day of Ms Gillard's five-day visit to China in a ceremony in the Great Hall of the People on Tiananmen Square.

"Naturally, new architecture will not do the work for us or make hard problems in our relationship easy,'' Ms Gillard said.

"What it will do is elevate our existing habits of dialogue and co-operation.''

The bilateral mechanism, known as "architecture" in international diplomacy, will be supported by extra permanent resources and annual meetings, including involving the countries' foreign affairs ministers.

A new "strategic economic dialogue" is to be led by Australia's treasurer and trade minister and, on China's side, by the chairman of the National Development and Reform Commission, regarded by China watchers as among its most influential economic positions.

In addition to the strategic partnership, the governments have signed into law the start of direct trading of Australian dollars and the Chinese currency, removing the need for an intermediate transfer into US dollars at the cost of time and money.

It is understood the push to establish a strategic partnership, a long-held Australian ambition, was accelerated last year by Ms Gillard who believed the looming change in China's leadership from then president Hu Jintao and prime minister Wen Jiabao, to Xi Jinping and Li Keqiang respectively, presented a new opportunity.

After writing to Mr Hu last April, she dispatched one of Australia's most senior bureaucrats, Dennis Richardson, to Beijing to build the case.

China's recognition of the relationship with Australia as a strategic partnership reflects the rapidly growing two-way trade, which is running at nearly $130 billion a year, as well as the leadership roles being played globally and regionally by both countries.

Australia and China are members of the United Nations Security Council (China as a permanent member), the G20, the Asia-Pacific Economic Co-operation forum, and the East Asia Summit.

Australia has established comparable ''architecture'' with only two countries, Indonesia, and India - the latter also instituted by Ms Gillard last year.

The signing ceremony on Tuesday formalised agreements for co-operation and co-ordination of development aid by both nations in the Asia-Pacific region; a memorandum of understanding for the monitoring of trade and movement of drug chemicals to inhibit the illicit drug trade; a co-operation agreement to develop another 700 megawatts of wind farms in Australia to be worth $1.6 billion; and a $1.5 billion contract for the development of the Dugald River zinc mine in Queensland.

Earlier in the week Ms Gillard met President Xi, and invited him to Australia. He is expected to visit next year.

The President, who has visited Australia several times, told her he supported the formal dialogue but also wanted to maintain direct links with the Australian prime minister.

The story Gillard scores coup with China agreement first appeared on The Sydney Morning Herald.

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