Marles opens door to deal on free trade

Trade minister Richard Marles has given the strongest indication yet that Australia will cede ground on investment restrictions imposed on China in order to strike a free trade agreement between the two countries.

In a hasty visit to Beijing designed to capitalise on the renewed impetus between Prime Minister Kevin Rudd and Chinese President Xi Jinping for an "early conclusion" to the protracted free trade talks, Mr Marles said "everything is on the table" with respect to a new proposal his negotiating team would put to Chinese officials this week.

He said compromise was needed to ensure an agreement would be reached, and provide free market access to Australia's largest trading partner, something he said was particularly important as Australia expanded its economic relationship beyond resources and into goods and services consumed by China's rising middle class.

"The ground that we are ceding today is in relation to access to the greatest market in the world," he said in Beijing on Wednesday.

"Part of being practical about this is agreeing what we can agree and putting to one side others [where we can't]," he said.

Mr Marles acknowledged China's main point of contention has long been its desire for fewer regulatory hurdles for investments by state-owned enterprises and better access to Australia's resources sector.

Mr Marles met vice-premier Wang Yang, commerce minister Gao Hucheng, and the head of sovereign wealth fund China Investment Corporation, Ding Xuedong.

Mr Rudd has made it a priority for his government to resuscitate the stalled talks. The two sides have failed to reach an agreement despite 19 rounds of talks since 2005.

Mr Rudd said "Australia places great importance on the Australia-China free trade agreement negotiations". Mr Xi said he hoped the two sides could use flexibility and creativity to "resolve the issues of each other's concern".