Australia and China’s relationship has taken a step forward as trade ministers met to discuss the removal of Beijing’s sanctions.

Trade Minister Don Farrell said he was confident Monday’s meeting would carve out a pathway removing $20 billion of trade sanctions against Australia.

“We want both sides to benefit from that trade,” Senator Farrell told his Chinese counterpart Wang Wentao.

“There are issues on which we disagree, which we should, but where possible, address those issues through dialogue which I’m hopeful we can do today.”

Senator Farrell said the outcome of the meeting could benefit Canberra and Beijing, saying Chinese people had increased Australia’s multiculturalism and its investment had helped the nation prosper.

Mr Wang said he would like the two nations to work together economically and invited Senator Farrell to visit China.

“I believe your next trip to China will leave you with a different impression,” he said.

“I am looking forward to professional, candid and practical exchanges of views.”

He said the priority of the meeting should be to build mutual trust.

“I wish to stress we will face up to the issues but at the same time this meeting cannot resolve all of these issues,” he said.

Although Mr Wang noted that while common ground should be sought, some issues “cannot be resolved”.

“China will not make a trade off on principled issues.”

The meeting marked the first time in three years Australian and Chinese ministers responsible for trade have met and is expected to lead to an in-person discussion.

Australia has called for calm after a suspected Chinese spy balloon was shot down in the United States.

Foreign Minister Penny Wong said it would benefit both countries if the trade sanctions were lifted.

“This is the first step of many, and both countries have to walk down the path to a more stable relationship,” she said on Monday.

“It is true many steps are being taken. It is probably also true that more steps have to be taken. We will continue to do that.”

The foreign minister added while it was concerning the balloon entered US airspace, allies including Australia must be measured in their response.

Senator Wong said it was important for countries including Australia to continue to engage with China and prevent its competition with America escalating into conflict.

“We share the US’s concerns about the infringement of US sovereignty and the violation of international law and that the US has acted in a careful way, a responsible way,” she said on Monday.

Senator Wong urged for talks between the two world powers to continue.

US Secretary of State Antony Blinken has postponed a planned visit to China following the balloon incident.

Senator Wong said Australia was focused on stabilising its relationship with China and abolishing trade sanctions.

The foreign minister said Australia would always ensure its sovereignty was protected.

“We will always encourage other countries to act in accordance with international law,” she said.