Chinese envoy says ties with Australia must be mended before solving trade issues

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SYDNEY, Aug 10 (Reuters) - China's ambassador to Australia said that more needed to be done to reset relations between Canberra and Beijing and that the two nations were not at the stage of solving political and trade disputes.

Speaking to the National Press Club in Canberra on Wednesday, China's ambassador, Xiao Qian, also said there had been no meeting between leaders from the two trading partners in recent years because Beijing believed a face-to-face meeting could worsen strained ties.

"It's because we did not believe the meeting would help to improve the relationship and we were concerned the meeting could perhaps make things even more deteriorated," he said.

China is Australia's largest trading partner and the biggest customer for its iron ore.

Beijing imposed trade sanctions on Australian products ranging from coal to seafood and wine in response to policies and decisions such as Australia's call for an investigation into the origins of COVID-19 and its 5G network ban on Huawei.

Australia and China's foreign ministers met for the first time in three years last month on the sidelines of a G20 meeting in Bali, after the election of a Labor government.

Despite some contact between ministers, "we have not yet come to the stage to discuss about how to solve those specific issues, political issues, trade issues", Xiao said on Wednesday.

He said it was "a good start only and there is a lot to be done to really reset this relationship".

Coal stocks had jumped last month on rumours China would lift an unofficial ban on Australian coal in place since 2020.

The Chinese embassy on Saturday criticised a joint statement from Australia, Japan and United States that expressed concern on Friday over China's military exercises in the Taiwan strait. (Reporting by Kirsty Needham. Editing by Gerry Doyle)