China's Li calls for 'new level' in Australia ties

China's vice premier Li Keqiang called for a "new level" of ties with key trade partner Australia Friday as he began a visit seen as smoothing relations after months of rocky ties.

The high-ranking Li, who will meet Mandarin-speaking Prime Minister Kevin Rudd later, pledged to advance free-trade talks and urged closer people-to-people contacts between the two countries.

"We should seize and look at the general picture and we should ensure our bilateral relationship is brought to a new level and greater depth consistently," Li told the Australia-China Business Council.

Li is the most senior Chinese official to visit Australia since the arrest of a senior Rio Tinto mining executive in July triggered a brief diplomatic crisis.

He said there were enormous opportunities for cooperation between the countries, who enjoyed trade worth 74 billion dollars (67.7 billion US) last year, mainly sales of Australian iron ore and coal.

"China and Australia have extensive common interests and a solid basis for cooperation in many areas," he said, adding "the bilateral relationship has become more strategic in nature."

Li also said China was committed to negotiating a free trade deal with Australia, and that there was scope to expand the trade relationship beyond energy and resources.

The warm words follow a frosty period in recent months sparked by the arrest of Stern Hu, an Australian passport-holder, in Shanghai, just weeks after Rio knocked back a huge cash injection from China's Chinalco.

Other Chinese attempts to buy into Australia's huge resources sector also hit trouble, while the two sides also sparred over Australia's move to allow a visit by exiled Uighur leader Rebiya Kadeer.

Chinese ambassador to Australia Zhang Junsai was also upbeat, saying relations with Canberra were "facing a new starting point."

"I believe it will enter a new phase through joint efforts in boosting cooperation," he told the official Xinhua news agency.

Queensland University analyst David Martin-Jones said trade concerns had prompted the visit of Li, who is travelling with vice foreign minister He Yafei, the vice minister of agriculture and deputy commerce minister.

"The ongoing debate is to what extent is Australia going to allow the Chinese access to Australian resources," Martin-Jones told AFP.

"This visit is to facilitate the trading relationship as much as anything."

Li met Deputy Prime Minister Julia Gillard earlier Friday and is set to sign a range of bilateral agreements on forestry, education, telecommunications and cultural relics.

-- Dow Jones Newswires contributed to this story --