Their meeting is seen as a prelude to negotiations on a Sino-Australia free trade agreement (FTA), which has been highly praised by the Australian media.

The meeting will set a substantial framework and the agenda for the FTA negotiation between the two sides, which is supposed to take two years.

The Australian Government knows well that trade co-operation with China will bring a lot of business opportunities and the FTA talks will accelerate the two countries' domestic micro-economic reforms.

Also, the negotiation will have significance beyond the two countries for its political influence.

Europe, which pays special attention to economic co-operation with China, has invited Raby to Brussels to discuss FTA affairs.

China attaches high importance to co-operating with Australia for its significant role in international trade.

Australia has signed free trade agreements with New Zealand, Singapore and Thailand. Its FTA talks with the United States have also come to a close.

During his visit to Australia earlier this year, President Hu Jintao stressed China and Australia could both benefit from close trade relations.

The Australian Government has also indicated it regards China as an important trade partner.

It did not follow the suit of the United States to pressure China to revalue renminbi. It also disagreed with some countries' claim that China remains a "non-market economy country" and has revised its anti-dumping act to facilitate bilateral trade.

These moves have created a warm atmosphere for China to start the Sino-Australia FTA talks.

China has become the biggest market for Australia's resource exports. And the upcoming FTA talks will certainly benefit Australia's agriculture, livestock husbandry and education services.

As a senior Australian trade expert put it, the FTA talks will promote more intensive economic integration between China and Australia.

Public service dilemma

A watchdog or a shareholder? The government should make clear its role in the reform of public service industries, according to an article in the Southern Metropolis News. An excerpt follows:

The market-oriented reform in public services, such as power plants, waterworks and gas houses, is gathering steam as some local governments opened these previously State-monopolized fields to private and foreign investors several years ago.

The reform will ease the fund shortage and improve the efficiency of public services. Competition in this sector will also benefit consumers.

But noticeably, the opening of public services is still incomplete in many places, where State capital may retain holding stakes in joint ventures or still enjoys the monopoly secured by local governments.

Such a management framework may not be the best option. On one hand, the participation of non-State capital will promote public services to improve profitability. But on the other hand, the pursuit of money may also stimulate public services to cash in on the monopolistic status at the expense of consumers' interests.

Some local governments have made it clear that a public hearing will be mandatory if public services require price hikes in the future.

However, previous hearings held by local governments and industrial regulators have, without exception, given nod to monopolistic companies in their jurisdiction asking for price increases.

Whether the government can resist joint-venture public services' unreasonable profit-seeking demands remains questionable in that the government itself holds equity interests in these companies.

It is worrying that the incomplete reform in public services could sour the government's role of supervision.

If public services remain purely State-run, it is easier for local governments to regulate them to satisfy public interests. Nor would regulation be a problem if these businesses were wholly private.

But when other investors join hands with the government to run these public-serving trades for profit, it will be hard for the government to remain impartial.

Some local governments have the good intention to revamp public services through reform and still retain control over them.

But the consequence is that monopoly continues while supervision is weakened.

The government must make a decision when its roles of shareholder and watchdog conflict.

The government's responsibility to the public suggests that it grant free competition between private businesses and distance itself from market activities.

To supervise others will be easier than self-supervision.