CANBERRA, Feb 24 (Reuters) - Australia and China will on Wednesday resume free trade talks frozen for more than a year, aiming to reach a deal which could inject up to $124 billion extra into Australia's resource-rich economy over coming decades.
More than 30 Chinese officials were attending the talks in Canberra, a spokesman for Trade Minister Simon Crean said, with two days of negotiations set against a backdrop of recent strains over China's arrest of an Australian mining executive.
China and Australia announced plans for a free trade deal in April 2005, but there have been no negotiations since the 13th round of talks in Beijing in December 2008.
China is Australia's biggest trading partner, with two-way trade worth some A$76 billion ($67 billion) in the year to June 30 and China buying more than A$25 billion worth of Australian iron ore and coal.
Deputy Reserve Bank Governor Ric Battellino this week said Australia's A$1.1 trillion economy was experiencing a boom in mining and associated investment as the effects of the global financial crisis weakened and China's economy strengthened.
Crean earlier this month pointed to agriculture as the most serious remaining stumbling block, but said both countries had the political will to strike a deal.
Chinese state-owned companies are eager to buy into Australian mining assets to secure supplies of raw materials in its rapidly growing economy, the world's third largest, and China wants more clarity on Australian foreign investment rules. But China is reluctant to open its market to Australian agriculture and the two have unresolved differences over the lack of strong rules to protect intellectual property in China. (Click here for a FACTBOX on Australia-China ties)
Relations between Australia and China plummeted in June 2009 over a failed bid by China's state-owned Chinalco to buy a $19.5 billion stake in mining company Rio Tinto. China's arrest of Australian Rio executive Stern Hu, who has been indicted to stand trial on charges of bribery and stealing commercial secrets, has also strained ties.
($1=A$1.125)
(Reporting by Rob Taylor; Editing by Jeremy Laurence)