Gillard lands a big one with China deal

Prime Minister Julia Gillard with year 11 students at Chenjinglun High School in Beijing. Photo: Pool
Prime Minister Julia Gillard with year 11 students at Chenjinglun High School in Beijing. Photo: Pool

Australia and China have formally committed to new annual leadership talks giving Canberra greater access than the Asian superpower has granted to 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, signing off on the new strategic partnership with her Chinese counterpart, Premier Li Keqiang.

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

Its formal completion follows months of 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 annual forum will be supported by additional permanent resources as well as annual meetings at sub-leadership level, involving both foreign ministers.

A new ''strategic economic dialogue'' is also a key underpinning 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 close China watchers as among its most influential economic positions.

The two governments also 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.

Fairfax believes the push to establish the new 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 premier Wen Jiabao to Xi Jinping and Li Keqiang respectively, presented a new opportunity.

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

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

Australia and China are co-members of the UN Security Council (China as a permanent member), the powerful G20, APEC and the East Asia Summit.

Australia has established comparable agreements with Indonesia and India, the latter inaugurated by Ms Gillard last year.

Yesterday's signing ceremony also formalised agreements for co-operation and co-ordination of development aid by both nations in the Asia Pacific region.

This story Gillard lands a big one with China deal first appeared on The Sydney Morning Herald.