Two Chinese investment groups have established a $3 billion fund to invest in Australian agriculture.
The fund, known as the Beijing Australia Agricultural Resource Cooperative Development Fund, is a joint partnership between state-owned Beijing Agricultural Investment Fund and the Shenzen-based Yuhu group, ABC Rural reports.
It will focus on supplying produce to China, in particular infant milk formula, beef, lamb and seafood.
Australian trade minister Andrew Robb said it's a strong signal from the country's largest export market for agricultural produce.
"It's a great signal that the Chinese investors are looking, in a fairly significant way, to position themselves in Australia, and they are doing it in a sensible way," Robb said.
He says negotiations on a free trade agreement with China are progressing and he's confident a deal can be achieved by the end of the year.
"These things are very complicated. There are, for instance, 11,500 individual tariff lines that have to be negotiated. A lot of that work is done.
"But as always, with any negotiation, the really big important issues invariably end up in the final stages of the negotiations.
"So whilst we've been talking about it and have got a sense of where one another hopes to be, in many cases we haven't finalised the very critical issues."
Robb has given Australian dairy farmers an assurance that he is aiming to get them an equal footing with their New Zealand competitors, who finalised a free trade agreement with China several years ago.
Agriculture Minister Barnaby Joyce is currently in China with the message for Chinese farmers that Australian imports are not a threat and has been playing down the notion of Australia becoming “Asia’s food bowl”.