The meeting comes as China seeks to enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) free trade pact, which requires the approval of all 11 members, including Australia.
Treasurer Jim Chalmers said on Tuesday not all differences will be solved in one meeting, although Australia wants to see trade restrictions worth A$20 billion (US$13.4 billion) a year lifted.
“Part of stabilising this relationship would mean ideally the removal of those restrictions,” Chalmers told ABC Radio.
Scott Morrison’s Liberal government had described the sanctions, mostly falling on commodity exports, as “economic coercion” by China.
Australia Foreign Minister Penny Wong, in a speech on Sunday, sought to differentiate Albanese’s Labor government from its predecessor, which she said had tried to exploit differences with China for domestic political gain.
Australia under Labor would be “calm and consistent” on China, she said.
James Laurenceson, director of the Australia-China Relations Institute at the University of Technology Sydney, said the meeting matters because Xi is the only person with the authority in China to address Australia’s trade grievances.
“Xi might order the removal of sanctions, if not overnight, then gradually over time,” Laurenceson said. The meeting also sends a “strong signal … to the Chinese bureaucracy that Australia is no longer to be shunned”, he said.
National Farmers Federation acting CEO Warwick Ragg said: “Farmers welcome any moves to revive and improve access to Chinese markets and are hopeful this week’s meeting makes inroads towards that.”
Tuesday’s meeting will be the first between Xi and an Australian prime minister since 2016.
Australia’s relationship with China began to sour in 2017 when it introduced laws to deal with what it said was Chinese interference in Australian politics.
Beijing was also angered by Canberra’s 2018 decision to ban Huawei from its 5G network on national security grounds, a decision followed by other Western nations.
Two Australian journalists, Cheng Lei and Yang Hengjun, are also in jail in China awaiting sentences after closed-door national security trials.
Chalmers said Australia is “deeply concerned at the detention of those two people”.
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