Chinese premier and Australian prime minister meet at Australia's Parliament House

Chinese Premier Li Qiang, Australian Prime Minister Anthony Albanese and senior ministers of both administrations met at Parliament House on Monday to discuss thorny issues, including lingering trade barriers, conflict between their militaries in international waters and China’s desire to invest in critical minerals.

Li, China’s most senior leader after President Xu Jinping, arrived in the South Australian state capital of Adelaide on Saturday and the national capital of Canberra late Sunday in the first visit to the country by a Chinese premier in seven years.

Li planned to underscore China’s interest in buying a bigger stake in Australia’s critical minerals sector, which is essential to the global transition to renewable energy sources, by visiting a Chinese-controlled lithium processing plant in Western Australia state Tuesday.

Li visited New Zealand before Australia and is scheduled to stop in Malaysia before returning to China.

Bilateral relations have improved markedly since Albanese’s center-left Labor Party was elected in 2022 following nine years of conservative government in Australia.

Most of the official and unofficial trade barriers Beijing introduced in 2020 on coal, cotton, wine, barley and wood have been lifted since Albanese was elected.

Agriculture Minister Murray Watt said before the leaders’ meeting Monday that he would raise the issue of China's ban on Australian rock lobsters and exports from two beef processing plants.

“The mere fact that we have the first visit by a Chinese premier, the second-most powerful person in China, ... since 2017 is an enormous opportunity to continue that dialogue, to continue stabilizing our relationship and address some of the outstanding issues,” Watt told Australian Broadcasting Corp.

Australia shares U.S. concerns over China’s global dominance in critical minerals and control over supply chains in the renewable energy sector.

Citing Australia’s national interests, Treasurer Jim Chalmers recently ordered five Chinese-linked companies to divest their shares in the rare earth mining company Northern Minerals.

Watt said Chinese investment was not banned from the sector, but must meet national security criteria.

“One of the issues around critical minerals is that China absolutely dominates the world market,” Watt said.

“It is, we think, in Australia’s interests and global interests to make sure there’s a diversity of supply, but we haven’t ... a blanket ban against Chinese investment in critical minerals, but any investment decision takes into account a range of factors including national security requirements,” Watt added.

Albanese’s office said the prime minister would tell Li at a state lunch that the "points on which we disagree won’t disappear if we leave them in silence.”

This appears to be in response to a statement by Li, released by the Chinese Embassy in Canberra on Sunday, that he recommended “shelving differences” between the two countries in the interests of bolstering relations.

Albanese has said he would raise with Li recent clashes between the two countries’ militaries in the South China Sea and Yellow Sea that Australia argues endangered Australian personnel.

Relations tumbled over Australian legislation that banned covert foreign interference in Australian politics, the exclusion of Chinese-owned telecommunications giant Huawei from rolling out the national 5G network due to security concerns, and Australia’s call for an independent investigation into the causes of and responses to the COVID-19 pandemic.