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Australia signs a sensitive uranium agreement with China

BEIJING—China and Australia signed a sensitive deal on nuclear fuel Monday that underscores how their relations are deepening despite sharp public misgivings by the United States.

The deal, signed in Canberra, Australia, came barely two weeks after Secretary of State Condoleezza Rice traveled to Australia to urge containment of a rising China.

The deal calls for Australia, the world's second-largest uranium exporter, to provide nuclear fuel to China for power generation. Australia eventually may export 20,000 tons of radioactive uranium to China annually, double its current global exports, to supply the 40 to 50 nuclear reactors China plans to build in the next 20 years.

With Premier Wen Jiabao of China at his side, Prime Minister John Howard hailed the rapidly warming relationship between Canberra and Beijing.

"Of all the important relationships that Australia has with other countries, none has been more greatly transformed over the last 10 years than our relationship with China," Howard told Wen.

The uranium accord is the latest indication of the shifting economic and political sands in Asia associated with a rising China, and a corresponding U.S. campaign to ensure a firm hand in the region's affairs. Early last month, President Bush signed a sweeping nuclear-cooperation accord with India, partly aimed at bolstering India as a counterweight to China.

Few countries have been affected by China's rise as greatly as Australia. China's powerful demand for Australia's iron ore, coal and copper has driven Australia's economic boom.

"If you look at raw resources exports, they've grown 700 percent (to China) in the last decade," Malcolm Cook, an East Asian expert at the Lowy Institute for International Policy in Sydney, said in a telephone interview.

When Rice warned Australia in mid-March that China may become a "negative force" in the region and that its military buildup was a matter of concern, her Australian counterpart, Alexander Downer, offered a strong rebuttal.

"Australia's government is extremely sensitive to any idea of an American containment of China," Cook said. "Australia sees the rise of China as a huge economic opportunity with few diplomatic drawbacks."

The nuclear deal is sensitive because uranium also can be used as fuel for nuclear weapons. Downer downplayed concerns, saying the deal wouldn't make "the slightest difference" to China's nuclear-weapons arsenal. He added that the new agreement would help China diversify from coal and crude oil to technologies that don't emit greenhouse gases.

Under the trade agreement, Australian uranium would be provided only to electric utilities in China, and international inspections of nuclear facilities would be permitted.

Beijing said Wen's trip was essential to thwarting efforts to obstruct China's rise.

"Premier Wen's visit to Australia helps to weaken the `contain China' alliance and promote trust between leaders of the two countries," the state-run Beijing News said in an editorial Monday. The newspaper called for Sino-Australian relations to be upgraded to "strategic" status, giving them special weight.

Australia is unlikely to begin exporting uranium to China until "sometime past 2010" because of existing contracts and time needed to expand production, Industry and Resources Minister Ian MacFarlane told the Australian Broadcasting Corp.

Australia's uranium exports now go primarily to the United States, Japan, South Korea and the European Union.

India also has its eye on Australia's uranium deposits. But since it isn't a signatory to the nuclear Non-Proliferation Treaty, Australia has put off its queries.

China is now Australia's No. 2 trade partner, after Japan, and economic relations are bound to strengthen as the two nations hammer out a free-trade agreement, one of 27 such accords that China is negotiating with countries around the world.

Later this year, Australia will begin exporting $500 million to $700 million worth of liquefied natural gas per year to southern China's Guangdong province.

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(c) 2006, Knight Ridder/Tribune Information Services.

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