China wants Australia to drop World Trade Organisation complaints and reopen discussions over tariffs placed on some key exports.

China’s ambassador to Australia Xiao Qian addressed reporters in Canberra on Tuesday and said the new Labor government was restoring the previously tense relations between the two countries.

But Mr Xiao said it would be a “good idea” for the countries to settle their dispute over the $20 billion trade sanctions between themselves, rather than through the multilateral forum.

Relations between the nations have been strained in recent years, highlighted by China’s sanctions against Australian exports of barley, beef, cotton, wine, lobsters and grapes.

Australia has complained to the WTO about the barley and wine sanctions and the trade body’s findings are due later this year.

“Let’s see, according to the rules of the WTO, what we can do to solve these problems,” Mr Xiao told reporters.

“If the Australian side is ready to forget about … a multilateral solution and come back to a bilateral solution, I think it’s a good idea as well.”

Mr Xiao labelled the tariffs “so-called trade sanctions” and said Australia shouldn’t forget about the Chinese concerns that had prompted them in the first place.

“During the previous government’s term, certain measures were taken that really disrupted the normal kind of relationship.

“Chinese companies were threatened, they were astonished by some of the measures and policies and they became hesitant to invest … they’re having problems having more finance, no bank is ready to give them more money.”

Summing up 2022, Mr Xiao said the key words “Labor government” sprung to mind and said the relationship between the nations had been reset, and that trade between the nations would pick up.

He said meetings between Prime Minister Anthony Albanese and President Xi Jinping, as well as Foreign Minister Penny Wong’s visit to Beijing had been key moments in rebuilding the relationship which had been through “a difficult period of time” over several years.

“I would hope as we are improving our relations, we will have more encouragement to the Chinese companies, to the Chinese customers, to come back with a stronger appetite for Australian products,” he said.

The ambassador wouldn’t confirm last week’s reports suggesting China’s state planner had allowed three central government-backed utilities and a steelmaker to restart importing coal from Australia.

But he said it was up to Chinese companies to decide if they’d like to resume buying the coal and encouraged them to do so despite no specific directive from the government.

Mr Xiao flagged further exploration of “new frontiers”, especially in the area of green energy and electric cars.

“There is such a strong complementarity between the two countries,” he said.

By Alex Mitchell in Canberra