President Xi Jinping (R) meets with Australian Prime Minister Malcolm Turnbull in Beijing, capital of China, April 15, 2016. [Photo/Xinhua]
Beijing and Canberra have to respect each other's core interests to ensure stable development of the relationship, President Xi Jinping said on Friday.
Xi made the remark when he met Australian Prime Minister Malcolm Turnbull at the Diaoyutai State Guesthouse, before he hosted a banquet for the distinguished guest.
Turnbull's visit follows immediately after his calling China's military deployments in the South China Sea "counterproductive".
Beijing has said the United States is militarizing the region with frequent patrols and that China has every right to construction on its own territory.
Earlier this month, Australia for the first time joined a US-Philippines joint drill in the South China Sea, an exercise seen as apparently targeting China.
However, Turnbull made no mention of concerns over the South China Sea in his speech on Thursday in Shanghai, the first stop of his China visit.
On Friday, Xi told Turnbull, "Both sides should grasp the correct direction of developing bilateral relations, respect each other's core interests and major concerns and ensure the continuous, healthy and stable development of China-Australia relations."
Dong Manyuan, vice-president of the China Institute of International Studies, said after Xi's visit to Australia in 2014, "Australian politicians and citizens realized that China is the best partner for the country to realize its vision of revitalizing economy.
"Turnbull chose to play down the South China Sea issue during the visit - and that is no surprise.
"Deepening trade cooperation with China is his priority here, and he will not let incautious remarks ruin the visit."
Xi said both sides should link their own development strategies, implement the free trade negotiations, and push forward cooperation in areas including defense.
The China-Australia Free Trade Agreement took effect in December 2015. Under the agreement, more than 86 percent of Australian goods exports can enter China duty free, and that will rise to 94 percent in 2019 and 96 percent in 2029.
Xi also encouraged both sides take more measures to facilitate issuing visas to promote civilian exchanges.
Turnbull announced in Shanghai that Australia will grant 10-year visas to Chinese for the first time and allow online applications.
China is Australia's most important tourism market, with more than 1 million visitors last year.
Turnbull was leading a 1,000-company delegation, Australia's largest ever trade mission, to tap into the country's biggest export market.
Vice-Premier Wang Yang told CEOs from both countries at a round-table meeting on Friday morning - which Turnbull also attended - that the visit of more than 1,000 Australian entrepreneurs reflects a new high point for bilateral trade.
"It is a public opinion poll on the prospects of bilateral trade cooperation," he said in a speech.