South Australia and the People's Republic of China have signed a Memorandum of Understanding on trade and economic cooperation - the first agreement of its kind in Australia.

Premier Jay Weatherill said the agreement established a regular consultation forum between the Chinese Embassy in Australia and the South Australian Government.

"This is a landmark next step in deepening the relationship between South Australia and China," Mr Weatherill said.

"It is crucial that we have strong relationship with China because it is already our largest export destination and it will soon become the largest economy in the world.

"China's growing middle class will be a strong source of demand for our premium food and professional services and its growing urbanisation will continue the demand for our natural resources.

"Our capacity to fully develop our State will be increasingly dependent on inbound investment from China.

"This agreement will allow for regular discussion about bilateral trade and economic cooperation, major trade projects and investment opportunities."

Mr Weatherill said the MoU also would help to identify any difficulties that have emerged or are emerging in bilateral cooperation and explore solutions to ease and encourage investment and trade.

The first of these consultations is being held after today's signing ceremony and will involve the Premier, Ambassador Chen Yuming and senior Government and Embassy officials.

Manufacturing, Innovation and Trade Minister Tom Koutsantonis said today's signing reflected the value placed on the relationship with China, as well as the potential for deeper collaboration in mineral resources, agriculture and advanced manufacturing.

"South Australia's diverse economy and our natural resources are attracting interest and investment from Chinese companies," Mr Koutsantonis said.

"At this point we have 20 joint ventures between Chinese resource and investment groups and South Australian explorers and mining companies."

"South Australia-China alliances will become more common as we continue to develop partnerships that support China's rapid industrialisation and urbanisation," Mr Koutsantonis says.

"The closer communication between the Embassy in Australia and this Government will enable a greater understanding and awareness of the challenges facing both Chinese companies in South Australia and South Australian companies in China.

"The strengthening of this relationship cannot be underestimated. This is great opportunity for South Australia to embed itself as an essential strategic business partner for China."

26 June 2012