Australia on Tuesday elevated its ties with China to a “strategic partnership” – a level of engagement the country has with few nations, such as India and Indonesia – with Prime Minister Julia Gillard in Beijing hailing the move as a diplomatic “breakthrough”.
The two countries have agreed to institutionalise regular meetings between their two Premiers to be held annually, and have also started a strategic and economic dialogue between their Foreign Ministers and top economic officials.
China has a similar arrangement with only few countries – including the U.S., Russia and Britain. This reflected “evident commitment to the Australia-China relationship”, said Ms. Gillard during an interaction with a small group of reporters here.
“This is a significant breakthrough”, she added, saying there were “few countries more important to us than China”.
Australian officials went as far as comparing the agreement to the historic establishment of diplomatic ties by Gough Whitlam. The agreement was, however, sparse in specific details about how it would actually deepen engagement.
Chinese officials pointed out that the annual meeting between the Prime Ministers may also be scheduled along the sidelines of multilateral summits – heads of the two countries have, in any case, held such annual meetings in the past few years.
Ms. Gillard’s trip to China has, however, underscored the rapidly deepening economic ties between the two countries.
On Monday, both countries signed a landmark deal to trade directly in their currencies, making the Australian Dollar only the third currency to directly trade in the mainland foreign exchange market after the U.S. Dollar and Japanese Yen, the official Xinhua news agency reported.
The deal is set to boost the already substantial $ 120 billion annual bilateral trade between the two countries, which has been driven by Chinese appetite for natural resources. India and Australia, by way of comparison, have an annual trade of around $ 18 billion.
“People in Australia understand how important China is to our future,” Ms. Gillard said, with China now Australia’s single biggest trading partner.
Deals worth at least $ 3 billion were also signed between Ms. Gillard and her counterpart Li Keqiang, including investment agreements for developing mines and wind farms.
A focus of this visit has been to boost strategic ties, which have been seen as lagging behind the substantial commercial relationship. Ms. Gillard has attempted to carefully balance Australia’s deepening economic ties with China with the country’s close strategic and security relationship with the U.S.
Chinese analysts have, recently, written about the relationship with some suspicion, after Australia last year agreed to host 2,500 U.S. marines in Darwin. The move was widely seen by analysts in Beijing as being directed at China.
In an apparent bid to assuage those concerns, Ms. Gillard discussed defence ties in some detail. She announced in Beijing that Australia would consider having trilateral defence exercises with China and the U.S. to boost trust.
The proposal was not, however, brought up during her interactions with President Xi Jinping and other leaders, officials said.
