The first high-profile trade talks between China and Australia in more than three years next week are expected to pave the way for Prime Minister Anthony Albanese to visit Beijing later this year, two sources with direct knowledge of the issue said. Trade minister Don Farrell said on Tuesday that he had “organised” to hold a virtual meeting next week with Chinese counterpart Wang Wentao in a further sign of easing bilateral tensions, which have raised hopes that China may remove years of import bans and restrictions on Australian products. Albanese then “looks forward to seeing” a face-to-face meeting between Farrell and Wang as the next step, said the sources, who took part in a closed-door meeting with the Australian prime minister on Wednesday. The sources also confirmed Albanese is then “anticipating to visit Beijing” later this year, although a timetable has yet to be agreed. Australia’s Department of Foreign Affairs and Trade said the meeting “is another significant step as we stabilise the relationship between our two countries”, adding that “a decision on further meetings will be made at an appropriate time”. It is in both countries’ interest for trade impediments to be removed. Department of Foreign Affairs and Trade “Ministers are expected to discuss a range of trade and investment issues between Australia and China. Minister Farrell will advocate for the removal of trade impediments which continue to affect a wide range of Australian exports to China,” said a department statement sent to the Post on Thursday. “This will take time to resolve, but it is in both countries’ interest for trade impediments to be removed.” China’s Ministry of Commerce also confirmed the virtual meeting at a regular press conference in Beijing on Thursday. “China is willing to work with Australia to usher bilateral cooperation based on mutual respect,” said commerce ministry official Yang Tao. “Both countries will discuss trade relationship and related issues at the meeting.” As part of the easing of tensions following Albanese’s meeting with Xi Jinping in November and the first Australian foreign minister to visit China since 2018 in December, the sources said Australian lobsters will also be allowed to legally return to the Chinese market in March after coal was reportedly received by Chinese buyers in February. “This is the peak season for rock lobsters in Australia with retail prices dropping to A$50 (US$35) per kilogram from A$60,” one of the sources explained. “The industry is already foreseeing higher prices later due to legal imports to the Chinese market kicking in again.” More than 90 per cent of Australian rock lobsters were exported to China in 2019, according to the Australian Department of Agriculture, but had fallen to virtually zero by November 2020 due to what is seen as an unofficial trade ban despite some entering through so-called grey channels via the likes of Hong Kong. Farrell hopes “to start the ball rolling” in improving a bilateral relationship that has been strained since 2020 – during the administration of Scott Morrison – as part of next week’s meeting, which is set to be dominated by pragmatism, analysts said. Zha Daojiong, a professor at Peking University’s School of International Studies, said a more fundamental cause for “this pragmatism” – for the Australian side – is that after the “anybody-but-China” approach adopted by Morrison, laws of economic geography are settling in. It is a certainty that the trade disruption measures will be a focal point of discussion James Laurenceson “There is a higher degree of market compatibility between Australia and China,’ he said. “In contrast, security- or democracy-based trade promotion with economies like India, Japan, the US and the UK has shown its limits.” Australia’s assistant minister for trade, Tim Ayres, called for the removal of China’s “trade impediments” on Australian exports after meeting with Chinese counterpart Wang Shouwen on the sidelines of the World Economic Forum’s Annual Meeting in Davos last month. “It is a certainty that the trade disruption measures will be a focal point of discussion,” said James Laurenceson, the director at University of Technology Sydney’s Australia-China Relations Institute. “The groundwork for that discussion has already been laid by bureaucrats and a meeting of deputy trade ministers two weeks ago.” China is Australia’s largest two-way trading partner in goods and services, according to Australia’s Department of Foreign Affairs and Trade, accounting for nearly one third of the country’s trade with the world. Two-way trade with China grew by 6.3 per cent in 2020-21, totalling A$267 billion (US$189 billion), the department said, while Australia’s global two-way trade declined by 5 per cent during the same period. This was despite Beijing imposing both official and unofficial bans on a variety of Australian products, including coal, lobsters, barley and wine, after Canberra called for an international inquiry into the origin of Covid-19. China’s ambassador to Australia, Xiao Qian, said last month that there was “no such thing” as official sanctions on Australian exports, and instead said Chinese companies may have hesitated to maintain their existing relationships as ties between Beijing and Canberra had deteriorated. The provocative language of the former Australian government is now a thing of the past and the Chinese sanctions have proven counterproductive David Morris “Trade is the low hanging fruit,” added Zha, as both nations have formed “a domestic fortitude” for cooperation, with actions in South Pacific island nations, including the Solomon Islands, and Fiji having reminded China of the limits on its contest with Australia in the realm of security. David Morris, the vice-president at the United Nations Economic and Social Commission for Asia and the Pacific, said that “a sufficient time has now passed” since the change of government in Australia for “a more cooperative and less confrontational relationship” to be reset. “The provocative language of the former Australian government is now a thing of the past and the Chinese sanctions have proven counterproductive,” said Morris after Albanese’s Labor Party replaced Morrison’s Liberal-National Coalition government in May. “Australia and China are interdependent economies with both benefiting strongly from the economic relationship. It is timely therefore that normal trade will be restored.” China is most dependent on Australian iron ore, liquefied natural gas and wool, according to a report from the Lowy Institute in October , while figures from the Australian Bureau of Statistics showed that China buys more than 90 per cent of Australian lithium. “While some of the political and strategic winds are blowing in a more restrictive direction, the economic and business reality is still that China is the global hub of critical minerals processing and for the production of manufactured goods embodying clean technology,” added Laurenceson. Canberra’s position is still being worked through on technology and critical minerals, he added, but the economic reality will demand a level of pragmatism to Australian policy that is not necessarily present in the United States. Zha said a virtual meeting between the Australian and Chinese ministers “saves the effort” to face Australian and other Western journalists, who tend to question the rationale behind Australia’s normal interactions with China. “There may be some loosening of geopolitical reviews of Chinese investment in Australia, though limited to non-sensitive technologies and services,” he added, saying that there will be more Australian investment in China to strengthen cooperation and the market.