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Howard trade trip signals closer ties

The Standard, Hong Kong

Howard trade trip signals closer ties

27 June 2006

(Reuters)Australian Prime Minister John Howard will pay a two-day visit to China from today to promote gas exports and plans for a free-trade deal with the booming, energy-famished economy.

Howard will visit Shenzhen for a ceremony to mark initial shipments of super-cooled, compressed natural gas from Australia’s North West Shelf project under a 25-year, US$19 billion (HK$148.2 billion) export deal signed a few years ago.

He will then hold talks with Premier Wen Jiabao in a meeting analysts said would highlight Canberra’s eagerness to embrace the rise of China, despite Australia’s close ties with the United States, which remains wary of China’s growth.

"Howard has unmistakably signaled Australia’s intent to snuggle in close to Beijing, and he’ll be hoping to consolidate that policy setting without raising too many hackles in Washington," strategic analyst Ron Huisken said.

Howard, who has warm personal ties to US President George W Bush, would be a welcome visitor in China as he can give Beijing insights into the latest US thinking, Huisken said.

China is now resource-rich Australia’s second-largest trading partner with A$32.8 billion (HK$186.62 billion) of bilateral trade in 2004-05. The countries are in the early stages of negotiating a free trade deal.

Ahead of the visit, Howard said the arrival of the Australian LNG shipments was a milestone in bilateral relations, which would strengthen if the two sides could agree to a free trade deal.

"A successful outcome to free trade agreement negotiations will help to build the long-term economic partnership between Australia and China," Howard said in a statement.

Australia is a major source of minerals and iron ore for China, with mineral exports more than doubling over the past two years. Howard’s visit comes a week after China reluctantly agreed to a 19 percent price rise for Australian iron ore.

Howard is keen that Australia be seen as a reliable supplier of LNG to China, where gas demand is predicted to increase fourfold by 2020. He lobbied hard for the LNG agreement between the two countries.