UPDATE 2-China wants urgency in Australia free-trade talks

* China calls for urgency in FTA talks

* Chinese vice premier to meet PM Rudd

* Australia approves another Chinese resource deal (Updates with latest China resource deal approved, background)

By Michael Perry

SYDNEY, Oct 30 (Reuters) - China called on Friday for an urgent resolution of issues that stand in the way of a stalled Sino-Australia Free Trade Agreement (FTA), adding it was ready to allow competitive Australian imports.

First Vice-Premier Li Keqiang said if Australia and China remained "active" then he was confident of an early resolution and a "comprehensive, balanced and high-quality" FTA.

"These existing problems with the relationship, we should have a sense of urgency to resolve them," Li said in a speech to the Australia China Business Council in Sydney.

"I am confident as long as both sides are active ... these negotiations will achieve positive progress and we can achieve at an early date an FTA arrangement that is comprehensive, balanced and high quality," Li said through an interpreter.

Australia and China started talks on free trade deal in May 2005, but talks have stalled and negotiators from the two countries last met in December 2008.

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 Australia's Trade Minister Simon Crean has said Australia wants China to also be more open about foreign investment into Chinese enterprises.

Access to direct investments in China had become a bigger priority for Australia as it negotiates a FTA, says Crean.

China is currently Australia's biggest trading partner in terms of two-way trade, totalling around $61 billion in 2008.

Australia sells hundreds of millions of tonnes a year of minerals to China, but wants market access for its agricultural exports, as well as financial, legal and other services.

Li's visit to Australia is aimed at ending diplomatic tensions between the two countries over failed Chinese resource investment bids in Australia and the arrest of an Australian mining executive in China.

Li, heir apparent to China's premiership, will meet with Manadrin-speaking Prime Minister Kevin Rudd in the Australian capital Canberra on Friday night.

RESOURCE DEALS CONTINUE

The delegation will also focus on trade in Canberra, as it includes Vice Minister for Commerce Yi Xiaozhun, who heads trade negotiations, and Vice Minister for Agriculture Wei Chaoan.

"China-Australia FTA negotiations should be promoted from a strategic persepective," said Li, stressing the need for mutual benefit in Sino-Australia ties.

He said the two nations should adopt "fully developed trade" and that China was now prepared to expand imports beyond the resource and energy industries.

"China and Australia should give full play to each other's strengths. We are ready to import products that are competitive," said Li. "If we can reach agreement on the FTA, it will benefit trade in the long-term."

In the meantime, Chinese firms continue to take stakes in the Australian resource sector and Canberra remains cautious about foreign ownership.

The latest China-Australia investment deal saw Chinese steel-maker Baosteel <600019.SS> take a 15 percent stake Australian iron ore explorer Aquila Resources , Aquila said on Friday. The government will also allow Baosteel to expand its stake in Aquila to 19.99 percent, the firm added.

Last Friday, Australia approved China's Yanzhou Coal's <1171.HK> $2.9 billion takeover of Australian coal-miner Felix Resources Ltd . But concerns over losing control of Australian resources saw the deal contingent on the firm's assets being run by an Australian company.

Australia's Foreign Investment Review Board has some 40 proposals before it, the majority Chinese state-owned entities. (Editing by Jonathan Standing)