Australia's Gillard woos China and presses on human rights

BEIJING (Reuters) – Australian Prime Minister Julia Gillard on Tuesday pressed China on human rights and North Korea, while seeking to boost trade with her nation's biggest buyer of coal and iron ore.

The goals for her visit to Beijing highlighted the awkward challenges facing Australia and other Western governments: a desire to prod China's leaders over human rights and regional friction while trying to nurture trade ties with the world's second-biggest economy.

"The relationship with China is in good shape," Gillard told reporters after meeting Premier Wen Jiabao. "Of course, our economic relationship is a vital one for Australia's national interest, and it is growing in leaps and bounds."

Gillard said her talks focused on trade and investment, and speeding up negotiations on a free trade agreement. But she also raised human rights.

"I did have the opportunity to raise with Premier Wen issues associated with Australia's concerns with human rights," she said, noting China's "remarkable progress" in lifting its people out of poverty.

She pointed to concerns over China's treatment of ethnic minorities, rights activists and religious believers.

"(Wen) did indicate his view that his view is that China has not taken a backward step on human rights," she said.

The two leaders also oversaw the signing of several agreements and also a Chinese bank funding deal for developing the Karara iron ore project in Australia.

For Australia, finding the balance between courting and criticizing China is especially tricky.

No advanced economy is as dependent on China for its fortunes, but as a close ally of the United States it shares many of Washington's concerns about Chinese policies on North Korea, human rights and regional disputes.

China buys more than a quarter of Australian exports, having overtaken Japan as the country's largest trading partner in early 2009. Two-way annual trade has now passed A$100 billion ($107 billion), up from A$57 billion in 2009.

In 2009, ties between Canberra and Beijing were strained when China jailed four employees of the Anglo-Australian mining giant Rio Tinto, including the Australian national Stern Hu, for stealing commercial secrets and taking bribes. Gillard said she raised concerns about Hu in her talks with Premier Wen.

China has its own trade gripes.

In 2009, China Non-Ferrous Metal Mining Co was blocked from buying a controlling stake in rare earths miner Lynas Corp.. Australia also stymied China's Minmetals bid for Oz Minerals' Prominent Hill copper and gold mine because the mine was too close to a defense rocket range.

"There's a desire on both sides to put 2009 behind them. I think the government is looking to reset the relationship and put it on a more pragmatic footing," said Andrew Shearer, director of studies at the Lowy Institute for International Policy in Sydney, who formerly worked as a policy adviser in the Australian government.

"But try as you might to focus on the win-win trade relationship and so forth, other issues will inevitably intrude," he told Reuters.

INTRUSIVE ISSUES

Those intrusive issues are likely to include North Korea, with Australia joining Japan and the United States in wanting China to exert more pressure on its ally in Pyongyang to back down from confrontation and resume nuclear disarmament talks.

"It is not in Australia's interest, nor is it in China's interest, to see acts of aggression from North Korea and instability on the Korean Peninsula," Gillard said.

A survey of public opinion published by the Lowy Institute on Monday found 75 percent of Australians see China's economic growth as good for Australia. But nearly two thirds disagreed with the statement that Australia's interests would not be harmed if Chinese power and influence grew.

Gillard said Australia did not have to fear a growing China.

"There is no reason for Chinese prosperity to detract from prosperity in Australia, the United States or anywhere in the world," she told a gathering of Chinese and Australian company executives. ($1 = 0.932 Australian Dollars)

(Writing by Ben Blanchard; Editing by Ken Wills and Jonathan Thatcher)