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Australian Prime Minister Anthony Albanese raised concerns about recent Chinese live fire exercises near his country in a meeting with Xi Jinping as China’s president urged the two sides to build on a “turnaround” in their relationship.
Albanese said he asked Xi about the lack of notice from Beijing on the naval exercises, which were conducted in February in international waters, but marked the furthest the Chinese navy has sailed down Australia’s east coast.
Xi replied that “China engaged in exercises just as Australia engages in exercises”.
The exchange came during a meeting and lunch on Tuesday in Beijing, where Albanese is halfway through a six-day state visit aimed at reaffirming economic ties with Australia’s most important trading partner amid global tariff turmoil and pressure from the US over security commitments to Taiwan.
One of the major accomplishments of Albanese’s first term was repairing economic ties with China after a two-year stand-off during which Beijing blocked Australian goods, including wine, coal, lobsters and barley.
“With the joint efforts of both sides, China-Australia relations have come out of the trough and achieved a turnaround in recent years, bringing tangible benefits to the people of both countries,” Xi told Albanese, according to state media.
“No matter how the international situation changes, we should stick to this general direction,” the Chinese president said, adding that China and Australia still needed to “enhance strategic mutual trust”.
For China, the visit offers an opportunity to capitalise on uncertainty generated by US President Donald Trump’s erratic trade policies to try to draw Australia closer on commercial issues — a strategy that mirrors Beijing’s approach with other US allies such as Europe and the UK.
“One of the things that has marked Beijing’s external relationships this year is that they’ve been trying to improve ties,” said Ian Chong, associate professor at the National University of Singapore. “They’ve been doing more outreach than they did previously.”
The meeting was the fourth between Xi and Albanese, and the first since Albanese’s Labor party was re-elected in a landslide this year on a surge of opposition to Trump. Albanese has not held an official meeting with his US counterpart, but said that he expected to do so before the end of the year.
Albanese has been aiming to strengthen economic ties in areas including steel production and tourism on the trip, which includes stops in Shanghai and Chengdu. He has been accompanied by executives from leading miners Rio Tinto, BHP and Fortescue as well as Macquarie Group and the Australian arm of HSBC.
China accounts for about a third of Australia’s exports, led by iron ore. Two-way trade in goods and services between the countries reached A$312bn (US$204bn) in 2024. Beijing’s ambassador to Australia pre-empted the trip by suggesting closer co-operation between the countries in areas including artificial intelligence and clean energy
Yet the countries’ commercial relationship has been complicated by a series of security issues.
The Financial Times reported on Saturday that the Pentagon has been pressuring Australia and Japan to clarify what role they would play in the event that China invaded Taiwan, over which Beijing claims sovereignty.
The Trump administration has also reviewed the Aukus security pact, a Biden-era agreement that will enable Canberra to procure nuclear-powered submarines and that is opposed by Beijing, the FT reported last month.
Albanese said on Tuesday that he “reaffirmed” Australia’s support for the status quo on Taiwan, and added that Xi did not raise the issue of Washington’s pressure on Canberra over defence of the island.
The Trump review of Aukus would be welcomed by China, pointing to tensions in a pillar of the security relationship between the US and Australia, said Chong. However, if Albanese was too receptive to China’s outreach, he could risk provoking hawks within the Trump administration.
“It’s not an easy line to toe for Australia,” said Chong. “It’s not an easy trip for Albanese.”
Euan Graham, a senior analyst at the Australian Strategic Policy Institute, said the timing was also “potentially embarrassing”, with Albanese “trying to drum up business” in China at the same time that his country was hosting military exercises with the US and UK.
Both sides endorsed the importance of international trade, with Xi saying that “all countries should jointly safeguard . . . multilateralism and free trade” given “chaos” in global trading relations.
Albanese said that while Australia supported free trade, it wanted to diversify its trading relationships. “What Australia is doing is engaging not just with China, but we engage as well with our partners around the world,” he said.
Albanese said he did not discuss with Xi his pledge during this year’s election campaign to return the port in Darwin, which was sold to a Chinese company almost a decade ago, to Australian ownership. The port is located near a US military base in the north of the country.
“Australia has a multi-layered relationship, as it must, with China,” Fortescue founder Andrew Forrest told reporters in Shanghai. There is a risk that “security becomes a distraction”, he added.
