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China and Australia are looking to make substantial progress in free trade negotiations with the aim of signing a balanced and mutually beneficial agreement within two years, Ministry of Commerce spokesman Chong Quan said on Monday.

He said that both sides have agreed to a December timetable to move to market access discussions on goods and services and continue to advance talks on easing investment restrictions.

The remark came after both sides failed to make progress on cutting tariffs for farm products, textiles, clothing and cars, which the Australian side has attributed to China's tardiness, according to insiders.

Chong didn't comment on the failure, but stressed that discrepancies in the two countries' economic structure and living standards should be fully taken into account.

"Problems will be resolved as long as both sides can see things from the other's perspective and be considerate," he said.

Chong reiterated China's concerns regarding farm produce, service trade and investment.

Earlier this week, following talks with visiting Minister of Commerce Bo Xilai, Australia's new Trade Minister Warren Truss also expressed his determination to reach an agreement.

The top leadership of both countries is determined to push ahead with the free trade negotiations.

In April, Chinese Premier Wen Jiabao and Australian Prime Minister John Howard reached a four-point consensus on free trade area talks. In June, they both reiterated hopes of reaching an agreement in one or two years.

(Xinhua News Agency October 18, 2006)