President Xi Jinping said an improvement in relations between China and Australia has benefited people in both countries.

His comment came in talks with visiting Australian Prime Minister Anthony Albanese, who said that dialogue is the key to better ties.

The meeting on Tuesday between Xi and Albanese in the Great Hall of the People in Beijing came amid threats of US tariffs and rising geopolitical tensions.

Xi told the Australian prime minister that Beijing is ready to work with Canberra to deepen bilateral ties, which have recovered from a potentially full-blown trade war.

“With joint efforts from both sides, the Sino-Australian relationship has risen from setbacks and turned around, bringing tangible benefits to the people of both countries," he said.

"The most important thing we could learn from this, is that a commitment to equal treatment and seeking common ground while sharing differences and pursuing mutually beneficial cooperation serves the fundamental interests of our two countries and our peoples."

Albanese, in welcoming the improvement in relations, said dialogue has to be at the centre of bilateral ties.

“Australia values our relationship with China, and we'll continue to approach it in a calm and consistent manner guided by our national interest, by which we regard very much as the relationship being positive is just that," he said.

"It is in our national interest, and indeed, in the interest of the region as well.

"It’s important that we have these direct discussions on issues that matter to us, and to the stability and prosperity of our region."

China is Australia's largest trading partner, accounting for nearly one-third of its total trade.

Albanese is accompanied on his visit by a delegation of key business leaders. (Xinhua and agencies)