Australia, China sign deals worth $8.8 bn

I / Sydney June 21, 2010, 11:03 IST

Australia and China today signed 10 new deals worth $8.8 bn, mostly in resources and energy, after talks between Prime Minister Kevin Rudd and Vice President Xi Jinping.

"This demonstrates the dynamic relations between the two countries in this sector, and the strong complementarity of the two economies," Rudd said in a statement after meeting China's heir apparent in Canberra.

"The agreements will also see upgrades to infrastructure and will deliver jobs and regional development."

Xi, who is tipped to succeed President Hu Jintao in the next two years, is the first high-level Chinese official to visit Australia since the jailing of Rio Tinto executive Stern Hu in Shanghai in March.

Analysts said he would use the five-day trip to voice concerns about Australia's proposed 40 per cent tax on mining profits, a move that has stoked concerns about the costs of the resources China needs for its development.

One of the agreements, a $1.2 bn deal between Karara Mining Ltd, China Development Bank Corporation and the Bank of China will see the development of port and rail infrastructure in Western Australia.

Others support the development and expansion of coal and iron ore mining projects in the resource-rich Pilbara coast of Western Australia.

Another is to establish an $8.0 bn coal project involving the construction of a mine, a railway to port and the construction of a coal loading terminal near Bowen in Queensland.