We need to develop innovative ideas on how to best engage with China and create investment opportunities, Australia's Ambassador to China, HE Frances Adamson has told a CEDA audience in Adelaide.

She said investment is central to the success of Australia's relationship with China, and strategic investment by both countries is essential to the future of the relationship.

"There is a wealth of opportunities on offer for Chinese investors in South Australia, beyond the mining sector, including in renewable energy, infrastructure and manufacturing," she said.

"Chinese outbound investment is really a beginning and if Australia is a significant capital importer, it's going to continue to attract investment from China."

Although she believes the bilateral relationship is in good shape, she warned Australia needs to remain welcoming and competitive to build business.

Ms Adamson said we can do more to improve China and Asian literacy and there are a lot of gains still to be made.

"Almost 320,000 Australians were born in mainland China and another 450,000 Australians identify themselves as being of Chinese decent. After English, Mandarin is the next most common language spoken in Australian homes and Cantonese isn't far behind.  Over 570,000 Australians speak Chinese at home," she said.

"We need to encourage young Australians to learn Chinese and this is a key recommendation of the Asian Century White Paper."

She emphasised SA is uniquely placed to benefit from the increased ties with China.

"SA's two-way merchandise trade with China in the first half of this year was worth $3.5 billion and China was SA's largest trading partner," she said.

"According to the World Bank, China's urbanisation rate, currently around 51 per cent, should grow about one per cent per year for the next 30 years. That means another 13 million people moving cities each year.

"All of that applies for infrastructure for buildings, roads, rail, sports stadiums and theatres and all those things that make good use of Australian natural resources."

On education, Ms Adamson said Chinese students already account for close to 40 per cent of all international enrolments in SA and there is potential for further growth.

She praised tourism operators across Australia for becoming increasingly attuned to what Chinese tourists need including Chinese language signs in airports and hotels, Chinese speaking managers at hotels, Chinese options on breakfast menus and Chinese cable TV in hotels.

She said Chinese people's tastes are changing not just in terms of travelling abroad but they're also seeking high quality produce when at home.

"Australia and China will soon release a joint report into opportunities for cooperation on food security and I'm sure that SA with its excellent reputation can be one of the big winners from this cooperation," she said.

Premier of South Australia, Jay Weatherill said SA needs to project not only an image which is welcoming of China, of Chinese people, and of Chinese investment, but one which builds on the incredible strengths that we have as a State.

"There are hidden benefits with industries in SA. It's not all linear. Not just mining, food, education, but spread out in many other ways for networks and relationships to form," he said.

He announced he'll be leading a business delegation to SA's sister state Shandong in China, in the first half of 2013.

"To develop SA's relationship with Shandong, we will engage with senior Shandong government and business representatives to explore opportunities for bilateral economic cooperation, major trade and investment projects," he said.

SA has a proud 26 year state relationship with Shandong and in 2012 won the Friendship City Award for Engagement, a national award in China recognising outstanding communication, collaboration and exchange, he said.

To recognise the SA-Shandong relationship, Mr Weatherill said the 2014 OzAsia Festival, held in Adelaide, has been dedicated to Shandong to promote and deepen cultural exchange and awareness.

As part of SA's China Strategy, he said his Government's main strategic priorities to engage with China's growing markets and economy are:

• Mining;
• Advance manufacturing; and
• Premium food and wine.

As well as SA supplies of barley for the Chinese beer, Tsingtao…Exports of SA wine to China grew by 36 per cent last year to reach $100 million in value through premium brands like Penfolds and Jacob's Creek, he said.