Top trade officials from Australia and China are set to meet for the first time in three years, signalling a further step forward in diplomatic relations between the two countries.

The meeting is expected to take place despite tensions between the United States, one of Australia’s closest allies, and China after an alleged surveillance balloon entered US airspace and was shot down.

US President Joe Biden ordered the craft be shot down on the weekend after it had crossed over sensitive military sites across North America.

But Chinese officials insisted the balloon was a civilian aircraft and had entered US airspace accidentally.

Trade Minister Don Farrell is expected to go ahead with a virtual meeting with his Chinese counterpart Wang Wentao.

While the meeting’s exact date has not been confirmed, China’s $20 billion trade sanctions on Australian products including barley, rock lobsters and wine are expected to be at the top the agenda.

The minister confirmed the meeting in an interview with ABC’s 7.30 last week.

It will mark the first time in three years Australian and Chinese ministers responsible for trade have met and is expected to lead to an in-person meeting later in the year.

Mr Farrell said he wanted to start the process of removing the trade sanctions hurting Australian producers and the economy.

But he warned it would take time to resolve all the issues in China-Australia diplomatic relations.  

Mr Farrell’s meeting follows a successful visit to Beijing by Foreign Minister Penny Wong in December.

Prime Minister Anthony Albanese and Chinese President Xi Jinping met on the sidelines of the G20 summit in November.

By Maeve Bannister in Canberra, with Associated Press