The wine industry hopes a meeting between the Australian prime minister and the Chinese president could eventually lead to a lifting of tariffs, which are costing the sector more than a billion dollars a year.
Australia and China took the first step towards repairing their diplomatic relationship following a "constructive" meeting between Anthony Albanese and Xi Jinping on the sidelines of the G20 summit in Bali on Tuesday.
The new chief executive of the national association for wine grape and wine producers Lee McLean described the meeting as "very positive", but warned producers there was "a long way to go".
"Dialogue is great and we hope this sets the right conditions for further dialogue ... opening opportunities to resolve the import duties issue," he told AAP.
Mr McLean said producers shouldn't expect an immediate removal of import duties as a result of an initial meeting.
"This is probably the start of the process," he said.
China's $20 billion worth of trade sanctions on Australia were discussed at the meeting between the two leaders.
Chinese tariffs on Australian wine of up to 218 per cent were introduced in March 2021, and have made it unviable for most producers to sell into the growing Chinese market.
Sales have since dropped in that market by 98 per cent, with the import duties estimated to be costing Australian grape and wine businesses $1.2 billion a year.
Previously China had been the Australian wine industry's largest export market by value.
Mr McLean said there is still strong demand for Australian wine in China.
Agriculture Minister Murray Watt described the meeting between the nation's leaders as "significant" to the wine industry, and said he had talked with Mr Albanese following the meeting.
"This is a very positive step - the first such meeting between the two countries' leaders since 2016," he told an audience of wine industry representatives in Adelaide on Wednesday.
"There can be no doubt that our new government's renewed mature engagement in the Asia-Pacific is beginning to repair relationships damaged by the previous government."
Mr Watt said the Australian wine industry had paid a heavy price for the deterioration in relations with China.
"There is no denying the negative impact of China's trade bans on Australian wine, which have seen wine exports to China fall by 98 per cent since 2020, costing the industry nearly $2 billion," he said.
"We have been consistent that we want these trade blockages removed.
"It is in both Australia and China's interests."
