Australia's Prime Minister Julia Gillard achieved a diplomatic breakthrough in Beijing today when she and China's Premier Li Keqiang agreed that Australia and China will forge a strategic partnership. There will be an official announcement from Gillard and Premier Li in the next few hours. Consequently, the respective prime ministers will hold annual meetings and two Cabinet-level strategic dialogues will take place every year focusing on foreign policy and economics.

As I wrote in a June 2012 Lowy Institute Policy Brief, In Search of Political Trust: Australia-China Ties, Australia needs an annual structured high-level strategic and economic dialogue with China to ensure that Canberra's views are heard and taken seriously in Beijing. Australia must seek substantial political ties with China, the world's second largest economy and the country on which Australia's economic well-being is founded.

The decision to form a strategic partnership is significant. The announced partnership's architecture will facilitate regular high-level talks about both bilateral problems as well as regional issues. As I argued ten months ago, if political and strategic relations remain underdeveloped, it is conceivable that Canberra and Beijing will be unable to resolve problems within the economic relationship which inevitably emerge from time to time. Gillard has taken the first important step forward on the long march toward building political trust between the two countries.

I'll write more soon on the inside story of how this diplomatic breakthrough occurred.