The Gillard Government and China's Guangdong Party Secretary Wang Yang will develop a cooperation agreement between Australia and Guangdong's $840 billion economy.
Guangdong Province, with a population of more than 100 million and a GDP the same size as Indonesia's, ranks in the world's top 20 economies.
Work on an economic corporation agreement will begin immediately, following a proposal by Mr Wang during talks yesterday with Prime Minister Julia Gillard and Trade and Competitiveness Minister Craig Emerson.
"Mr Wang indicated he wanted to integrate Guangdong's thriving economy more fully with Australia," Dr Emerson said.
"This proposal, by a senior Chinese leader, is yet another vote of confidence in the Australian economy.
"We discussed the situation in Europe, and Mr Wang made it clear that he wanted to tie Guangdong's future more tightly with Australia's," Dr Emerson said.
Dr Emerson said any agreement would have a special emphasis on services, including education, tourism, financial, accounting and legal services, logistics and energy-saving architectural design.
In August last year, Dr Emerson led a 100-strong business mission to Guangzhou, the capital of Guangdong Province, and five other provincial Chinese cities.
Dr Emerson said the agreement would be a powerful pay-off from the visit.
"Mr Wang is an economic reformer, determined to modernise and spread Guangdong's economic growth throughout its 100 million-strong population," Dr Emerson said.
Mr Wang is a member of China's powerful Politburo, the country's supreme decision-making body.
He is visiting Australia as a Guest of Government at Dr Emerson's invitation.
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