Australia and China have sought to settle a series of simmering tensions during a fresh round of "frank discussions".
Foreign Minister Penny Wong met with Liu Jianchao, the head of China's international liaison department, in Canberra on Wednesday.
Senator Wong said the pair discussed the bilateral relationship, consular cases, adherence to international law and regional security.
Mr Liu also met with Opposition Leader Peter Dutton and frontbencher Simon Birmingham.
A spokesman for Mr Dutton said the pair reiterated the coalition's support for boosting economic ties and enhancing diplomatic talks.
They pressed the delegation on trade restrictions, the detention of Australian writer Yang Hengjun, tensions over Taiwan, human rights abuses in China and Hong Kong and the targeting of Australian citizens.
An incident between the Chinese navy and Australian divers was also raised.
Mr Dutton said the sonar incident was "unacceptable and unprovoked" and it was fortunate no one died.
"Mr Dutton asked that his concerns be relayed directly to the president," his spokesman said.
The incident involving a Chinese warship and Australian divers took place earlier this month in international waters in Japan's exclusive economic zone.
The destroyer switched on its undersea sonar while personnel from the Australian HMAS Toowoomba were trying to clear fishing nets from the ship's propellers.
At least one diver sustained minor injuries.
The Australian government has expressed serious concerns to China over what it called unsafe and unprofessional conduct.
Mr Liu poured cold water on Australia's outrage ahead of the meetings, saying its behaviour in the region gave "Chinese people a message that Australian naval vessels are there to contain China".
He said it was natural that any country would send a ship to monitor and identify any foreign vessels approaching their waters.
He also urged the Australian government and military "to act with great prudence" and warned such incidents could easily escalate if not managed properly.
The envoy called for both nations to improve trust and economic co-operation while managing their differences, suggesting Australia and China could work together on development challenges in the Pacific.
