Australia looks to 'dining boom' and trade deal with China

SYDNEY - Chinese President Xi Jinping's upcoming visit to the remote island state of Tasmania underscores Australia's push to ramp up agricultural exports, with the two countries on the verge of signing a free trade agreement.

Australia is attempting to transition from a reliance on exports of minerals such as coal and iron ore to expanding its food and agricultural exports to a growing Asian middle class, moving from a "mining boom" to a "dining boom".

A free trade agreement with China would be a huge boost for that aim and Tasmania, the only Australian state with a ban on genetically modified food crops and animal feed, is at the heart of the country's high-end production.

China is already Australia's largest trading partner, with two-way trade of about US$150 billion in 2013. But China has been concerned about opening its markets to Australian food and unhappy with strict Australian limits on investment by China's state-owned enterprises.

In Australia, meanwhile, ownership of farmland by foreign investors is a sensitive issue, but Prime Minister Tony Abbott has made reaching an agreement with China a priority.

Expectations are high that a deal will be announced after Xi's visit for the Group of 20 summit in Brisbane.

Xi will follow his Australian state visit with a trip to New Zealand, which already has a free trade agreement with China, benefiting from phased out tariffs in its key dairy industry.

On the eve of Xi's visit, Australian officials said a separate deal was almost agreed for Australia to eventually export up to 1 million head of cattle a year to China, worth about A$1 billion (US$856 million), to help meet a growing appetite for red meat.

Tasmania has found a range of its high-end produce, from beef, to salmon and the mustard-like wasabi, in great demand in Asia.

Xi will be presented with a "Bobbie Bear", a lavender and wheat stuffed soft toy that became a craze in China after actress Zhang Xinyu said it was her favourite bedtime companion, when he visits Hobart next week.

Media said Xi would also hold talks on using Hobart as a base for its Antarctic territory, where it has been rapidly expanding its presence.

China's official Xinhua news agency reported this week that China plans to install a satellite facility in Antarctica, where it is also building its fifth station and planning an airstrip.