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Australian leader to raise China, Trans-Pacific trade deal in Trump talks

SYDNEY, Feb 22 (Reuters) - China's rising power and a resurgent trans-Pacific trade pact will be at the top of the agenda when Australian Prime Minister Malcolm Turnbull and U.S. President Donald Trump meet in Washington this week, an Australian official said on Thursday.

The meeting comes as both seek to repair a relationship damaged last year by a row over asylum seekers in which Trump lambasted Turnbull over a resettlement arrangement that he labeled a "dumb" deal.

Washington will honor the deal to take up to 1,250 asylum-seekers held in Australian detention centers on remote Pacific islands, so Trump and Turnbull will now seek to find common ground on China and the Trans=Pacific trade pact, which aims to cut barriers in some of the region's fastest-growing economies.

"The prime minister is traveling with a large delegation of business leaders and he is very keen to talk trade opportunities, while China will obviously be an important element of the talks," said the Australian government official, who declined to be identified because he is not authorized to talk to the media.

Trump threw the original 12-member Trans-Pacific Partnership into limbo last year when he withdrew the United States to concentrate on protecting U.S. jobs.

Turnbull is still keen to promote the pact, the official said, even though it is likely to receive a lukewarm reception from Trump.

The remaining 11 members published an amended agreement on Wednesday that suspends or changes more than 20 provisions from the original pact, many of which had been inserted into the "TPP 12" at the insistence of U.S. negotiators. The revised deal is expected to be signed on March 8.

As an incentive, Turnbull will also propose spending an unspecified amount of Australia's pension pool to fund Trump's $1.5 trillion infrastructure plan, the official said.

The White House wants to use $200 billion in federal funding to try to encourage infrastructure improvements over 10 years by relying on state and local governments and the private sector.

Turnbull and executives from several Australian pension funds will address a meeting of U.S. governors on Saturday.

"Infrastructure in a growing and secure economy like the United States is often attractive for those funds," said Andrew Shearer, senior adviser on Asia Pacific Security at the Center for Strategic and International Studies in Washington.

Regional security is also set to dominate talks, with a particular focus on China, the Australian official said.

Trump, a harsh critic of China's trade policies, named U.S. Pacific Commander Admiral Harry Harris, known for his hawkish views on Beijing's military expansion, earlier this month as the next U.S. ambassador to Australia.

Australia's approach to China, easily its largest trading partner, has typically been more circumspect.

However, Sino-Australia relations soured in December when Turnbull said his government would introduce new laws to clamp down on improper interference by Beijing in Australian politics.

China denies the claim, and lodged an official complaint against the allegation. (Reporting by Colin Packham in Sydney; Additional reporting by David Brunnstrom in WASHINGTON; Editing by Paul Tait)