The Premier, Morris Iemma, has told a senior Chinese audience that a new Confucius Institute at UNSW will bring "enormous benefits" to both countries.

Mr Iemma was in Shanghai this week to witness the signing of a number of high level agreements between top Australian and Chinese universities.

UNSW will partner with the prestigious Shanghai Jiao Tong University to host a Confucius Institute on the Kensington campus from 2009. UNSW boasts Australia's largest Chinese studies program. The Confucius Institute will open doors for Australian academics and students in China, and enhance Chinese language education for students, business people and the wider community.

"The innovative energy of one of the world's youngest nations combined with the knowledge and wisdom of the world's oldest civilisation, will lead to enormous benefits for the universities of both countries," Mr Iemma said.

UNSW will co-operate closely with the University of Sydney, which will also host a Confucius Institute and joins institutions such as the London School of Economics, London University, the University of California, Los Angeles (UCLA) and Rutgers University where Confucius Institutes have already been established.

The Vice President of Shanghai Jiao Tong University, Professor Cai Wei and Pro-Vice-Chancellor (International) UNSW, Ms. Jennie Lang, signed a Memorandum of Intent to establish a Confucius Institute at UNSW next year, to coincide with the 60th anniversary of the University and the 60th anniversary of the founding of the People's Republic of China.

"Each agreement paves the way for strong partnerships across a broad range of disciplines," the Premier said.

"The credentials of NSW universities in energy, environmental and other areas of research are well established."