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Chinese visit seals end of chilly ties with Australia

(Agencies)
Updated: 2009-10-29 10:15

SYDNEY: The arrival of China's Vice Premier Li Keqiang in Sydney on Thursday seems to seal the end of diplomatic tensions between Canberra and Beijing.

Relations plummeted in June over a failed bid by China's state-owned metals firm Chinalco for a $19.5 billion stake in Anglo-Australian Rio Tinto and the arrest in China of an Australian executive with Rio over corporate espionage charges.

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China cancelled a high-level diplomatic visit to Australia and its media accused Australia of interfering in China's affairs when Australia granted a visa to an exiled ethnic Uygur leader.

But China's Ambassador to Australia, Zhang Junsai, said both countries had come to a consensus that they must manage their differences and that Li's visit to Australia reflected the long-term importance of Australia-China ties.

"The Chinese government sees it (Sino-Australia ties) from a strategic perspective. It is very comprehensive. It is very solid," he told The Australian newspaper on Thursday.

During his visit, Li will meet Prime Minister Kevin Rudd and sign agreements on education, the environment and telecommunications.

Chinese interest in mining assets

Chinese state-owned companies are eager to buy into Australian mining assets to secure supplies of raw materials in its rapidly growing economy, the world's third largest.

China is was Australia's second-biggest trading partner behind Japan in 2008, with two-way trade worth $61 billion.

Australia's foreign minister this week also declared an end to Australian-Sino tensions, saying it was "business as usual".

A string of Australian ministers have visited China in recent months to help repair ties, with Australia keen to maintain trade levels and restart stalled free trade talks.

Deals have been struck since August in which Chinese firms have bought stakes in Australian resource firms and earlier this month military leaders from both nations held brief strategic talks in Australia.

Last Friday, Australia approved China's Yanzhou Coal's $2.9 billion takeover of Australian coal-miner Felix Resources Ltd. But concerns over losing control of Australian resources saw the deal made contingent on the firm's assets being run by an Australian company.

How long ties remain warm remains to be seen, with Australian mining executive Hu Stern still to face court and some 40 proposals, the majority Chinese state-owned entities, still before Australia's Foreign Investment Review Board.