Australian Prime Minister John Howard arrived in south China's Guangdong Province on June 27 to launch a multi-billion-dollar liquefied natural gas (LNG) deal, a landmark project in the two nations' ever-deepening economic ties. It is also the first ever project for China that involves importing LNG from abroad. Howard's visit coincided with the arrival of the first commercial cargo of Australian LNG under a contract worth AU$25 billion signed in 2002. (AU$1=5.9263 yuan as of July 4)

This time, Howard chose to hold talks with his Chinese counterpart Wen Jiabao in south China's economically developed region, instead of China's political center of Beijing. With trade the top priority, the Australian Government has repeatedly noted that it does not share the concerns expressed by the United States and Japan over China's rapid economic development. China has replaced the United States to be Australia's second largest trading partner after Japan. The bilateral trade volume reached AU$37.4 billion last year from a mere AU$113 million in 1973, when diplomatic relations between the two countries were formally established. Meanwhile, China is Australia's largest source of international students and its second largest source of immigrants.

Chinese Premier Wen visited Australia in April, when the two countries signed a pact that secured Australia's uranium supplies to Chinese nuclear power stations.