PM: Australia world's strongest advanced economy

WASHINGTON (AP) — Australia has emerged from the global crisis as the world's strongest advanced economy, the nation's prime minister told U.S. business leaders Tuesday, urging increased American engagement in the Asia-Pacific for future prosperity.

Prime Minister Julia Gillard made the comments in a speech to the U.S. Chamber of Commerce, a day after her first visit to the White House since taking office last year. She voiced confidence that the U.S. would also "bounce back" from the economic downturn.

Australia's own rebound was helped by booming Chinese demand for its exports of natural resources such as coal, metals and minerals. But Gillard also credited 25 years of reforms that meant its banks were effectively regulated, its domestic markets were competetive and and long-term inflation was kept low.

She said Australia's budget will come back to surplus by 2013 and government debt is forecast to peak slightly above 6 percent of gross domestic product.

"We have one of the strongest budget positions in the world," Gillard said.

She welcomed the Obama administration's engagement with the Asia-Pacific, which Gillard described as being the center of global growth.

She noted "tensions to be managed and new balances to be achieved" — a likely reference to concerns that China's currency is regarded by many of its trading partners as undervalued, favoring the Asian nation's exporters at the expense of those of competing nations such as the U.S.

"These only strengthen the argument that Australian and American engagement in the Asia-Pacific will be critical to our continued prosperity," Gillard said.

The U.S. is Australia's third largest trading partner behind China and Japan, and the leading destination for Australian foreign investment. Those deep economic ties reinforce a long-standing and close relationship, including a 60-year-old military alliance.

President Barack Obama declared Monday that the United States has "no stronger ally than Australia." Gillard will address a joint meeting of Congress on Wednesday, making her the fourth Australian prime minister to be granted that opportunity.

On Tuesday, Gillard also met with intelligence chiefs and Secretary of State Hillary Rodham Clinton.

Later this week, she will travel to New York, where she meets with U.N. Secretary-General Ban Ki-Moon and visits the New York Stock Exchange.

Gillard will return to Australia at the weekend after stopping in Haiwaii to meet with the chief of the U.S. Pacific Command.