Agence France Presse

Beijing, April 18:

China and Australia today signed a memorandum of understanding (MoU) to formally begin negotiations on a free trade agreement that will include recognition of China as a free market economy. The MoU was seen as the showpiece agreement of prime minister John How-ard’s ongoing visit. It was sign-ed by China’s minister of commerce Bo Xilai and Alan Thomas, Australia’s ambassador to China, following talks between How-ard and prime minister Wen Jiabao. Both sides have been engaged in preliminary talks on a free trade agreement with a feasibility study already before the Australian cabinet. According to Chinese statistics, two way trade between China and Australia reached nearly $20.4 billion in 2004, up by 50 per cent from the year earlier and double the figure in 2002. China is now Australia’s third largest trading partner. In 2004, Australia’s exports to China grew to $9.3 billion, with resources accounting for about 60 per cent, Australian statistics show. Last week Australia agreed to negotiate a free trade deal with Malaysia while it already has FTAs with Thailand, Singapore, the United States and New Zealand. Howard arrived to Beijing for an official visit today and will depart on April 21 for Japan.