But progress on the most contentious issue, opening up China's lucrative services sector to Australian banks, insurers, telecommunications and transport companies, remained elusive.

The Chinese signaled they were interested in resources investment and greater temporary labor access, and indicated they would table draft text on these topics in the next round of talks, which are scheduled for early September in Beijing.

At last week's fifth round of talks, held in Beijing, the Australians tabled a draft template for an FTA comprising 15 chapters covering both goods and services and including all agricultural products. Officials close to the discussion described the engagement by the other side as positive and substantial.

Canberra is committed to signing a single, comprehensive free trade agreement, which would give Australian farmers, service providers and investors greater access to the Chinese market.

The Chinese have been pushing for "sequential" deals that would leave opening up the key services sector to a later date—which is the template for its FTAs with Chile and the 10 members of the Association of South—East Asian Nations. Australian businesses have potentially the most to gain if access to the service sector is included under the FTA.

While China has traditionally welcomed investment in manufacturing, there are elaborate restrictions on investment in services.

Agreement by China to include government procurement is also important. After President Hu Jintao's recent U.S. visit, China agreed to begin talks on joining the WTO's Government Procurement Agreement (GPA). This would allow foreign companies access to the lucrative area of government contracts. Australia is not a signatory of the GPA so it must win access to government tenders for Australian companies under the FTA.

(Source: Shenzhen Daily/ Agencies)