SYDNEY, Nov. 18 -- China and Australia's education sectors are proving to be the ideal platform for prosperous people-to-people exchanges, according to one of Australia's leading academics.

Prof. Fred Hilmer, president and vice-chancellor of University of New South Wales (UNSW), sees China-Australia cooperation in education will continue to develop positively in the coming years.

The Australian education sector has become a boom industry with more than 90,000 Chinese students living and studying in Australia.

After China and Australia signed a landmark free trade agreement on Monday, the ties and cooperation between the two nations will deepen, Hilmer said.

He said the education sectors of both China and Australia have evolved over the past two decades and there have been more partnerships formed between universities and colleges of both nations, resulting in ground-breaking research.

"We have come out of the phase where students come here for a degree, we have come out of the individual cooperation and moved to a partnership-based approach to education. I think that has greater promise," he said.

"In China there are many outstanding academics and over time it is getting better and getting stronger. Australia, while it's a small country, is very highly regarded in terms of education so it' s a good partnership.

"So we are a small partner with a big partner. Energy and metals will be important, but in terms of people-to-people impact, the development of education relationship is absolutely vital and a great opportunity."

Hilmer highlighted the benefits of "China's economic miracle" that help enrich the lives of so many Chinese people so that they could afford tertiary education in Australia.

He said Chinese student involvement in the Australian university system has evolved over three different phases, the first phase occurring when students started to come from China to Australia in the 1990s.

"It was an export of education and the Chinese students largely studied undergraduate degrees," he said.

"In this century, the relationship started to deepen and we went into a collaborative phase in which students were doing graduate studies and conducted research on an individual level.

"We had scientists here that were very good at aerodynamics and they were meeting at a conference and worked together with Chinese scientists and out of that came a lot of joint papers, and joint research. That was the collaboration phase."

Hilmer said the next level in Australia-China education participation is the relationship phase in which joint programs are being developed by different universities.

"We have relationships with Shanghai Jiao Tong University so we have joint programs and the students will come both ways, not just one way. Students will come from China to Australia, students will come from Australia to China," he said.

"We also do joint research, not just on an individual basis, but let's set up a unit, get space for the project and let's work on some important problems. For example, we are working in the area of water purification, how you deal with algae.

"What we are seeing in this collaborative phase is that we are really partners. That's where the future will be where we work together as partners as we bring a different perspective, different problems. Working in different languages is sometimes difficult, but it is sometimes an advantage because you have access to bodies of learning that you otherwise might not have been aware of."

Hilmer has an extensive business background, having been the CEO of one of Australia's largest media companies, Fairfax Holdings, and has written a number of books on strategy, organization and economic reform.

He said the China-Australia free trade agreement will be of great benefit to both nations, and the leaders of both countries need to highlight the positives rather than focus on so-called negatives within the agreement.

"I've been involved in economic reform so I'd like to be optimistic about free trade. I believe free trade is of great benefit to both sides," Hilmer said.

"But people are often afraid about free trade because they see the downside and don't see the upside. One of the challenges is to explain the upside."

In terms of education, Hilmer said the biggest trade barrier had been around Chinese students obtaining visas, but that issue had progressed very well in Australia.

"The information I get from China, and I was there a few weeks ago, was that this was no longer a problem. The processes are working much better.

"I don't think we are a main player about free trade, it's much more about tariffs, access to markets and some of the non-trade barriers that are not in anybody's interest."