Australia trumpets record deal with China

SYDNEY: Australia celebrated the biggest trade deal in its history on Wednesday and said it proved vital ties with China had survived a series of bruising rows.

Prime Minister Kevin Rudd said ExxonMobil's 41.3 billion US dollar liquefied natural gas contract with PetroChina would create up to 6,000 jobs and pump billions of dollars into the economy.

"This agreement provides the basis for the creation of thousands of jobs and also injecting billions of dollars into our economy," he said.

PetroChina ordered 2.25 million tonnes of liquefied natural gas (LNG) a year over two decades from ExxonMobil's share of the still-undeveloped Gorgon plant off Western Australia.

The huge contract, signed behind closed doors and announced late on Tuesday, comes despite weeks of friction over China's detention of a mining executive and Australia's move to allow a visit by top dissident Rebiya Kadeer.

Finance Minister Lindsay Tanner dismissed the controversies as mere glitches in a trade relationship worth 58 billion US dollars last year.

"Inevitably there will be the tension here and there, that's unavoidable," Tanner told Sky News. "But underneath that is a developing and very strong commercial relationship that's very important for both countries."

Foreign Minister Stephen Smith, who on Tuesday complained that a "most unhappy" China had downgraded an official visit over Kadeer, said it was business as usual for the two countries.

"Our relationship continues to be productive and very focused on the economic complimentarity of Australia and China, the fact that we are a reliable, safe and secure supplier of resources, and that China's economy continues to develop and enhance," he said.

Fast-industrialising China has maintained a big appetite for Australian resources despite the global downturn, pledging up to six billion US dollars in financing for Fortescue Metals as it signed an iron ore deal this week.

China's Yanzhou Coal has launched a 2.8 billion US dollar takeover of Felix Resources, while OZ Minerals sold most of its assets to Chinese firm Minmetals in June.

Chinalco's 19.5 US billion dollar cash injection was turned down by mining giant Rio Tinto, weeks before top executive Stern Hu was detained in Shanghai for alleged spying, later downgraded to industrial espionage.

Relations soured further over the visit by exiled Uighur leader Kadeer, whom Beijing blames for deadly rioting in Xinjiang last month.

Resources and Energy Minister Martin Ferguson, who was in Beijing for the deal's signing, said it showed Australia had a future as a "global energy superpower".

"We are a country built on foreign investment and we continue to welcome investments that develop our resources for the benefit of all Australians," he said.

"PetroChina is an increasingly important partner in the Australian LNG industry and I hope the relationship will be long and successful."

Wang Yong, a professor in international relations at Peking University, said the timing of the deal showed that China was willing to work with Australia to solve disputes.

"China will deal with disputes emerging between the two countries in a cooperative way," he told AFP.