Victorian timber log exports to China have been suspended after live bark beetle was found in shipments sent to Australia's biggest trading partner.
China's customs administrator has told the federal agriculture department that exports of all logs were suspended as of Wednesday.
Agriculture Minister David Littleproud said the suspension came after live bark beetles, commonly known as eastern five-spined engravers, were found in consignments of logs sent earlier in the year.
"There is concern around the effectiveness of fumigation treatments on shipments of bushfire affected logs for export," he told AAP on Thursday.
The department is working with the industry on boosting the treatment and inspection response and plans to write to Chinese authorities in coming days.
Chinese state media has reported that Australian sugar, barley, coal and timber would no longer be allowed into the country.
Winemakers have also been on high alert amid fears their product will be blocked from entering Australia's most valuable export market.
Premier Daniel Andrews said the state government commissioner in Shanghai had stressed the importance of the relationship to Chinese authorities.
"We export the best products in the world of their kind," he told reporters.
"We wouldn't want to see any barriers to us exporting, not just what we used to export but indeed new products and more of the same products, because that's all about jobs."
Opposition Leader Michael O'Brien suggested the suspension was another escalation in a trade dispute with China.
"I'm very concerned that the Chinese communist government has demonstrated by its trade tactics that it's not being particularly friendly to this country," he said.
He criticised the state government's belt and road deal with China.
"It is a deal that was supposed to be about improving market access for Victorian products, particularly agricultural products. Instead we see the opposite has happened."
Meanwhile, a new report has identified opportunities for Australia and China to rebuild trust following a breakdown in political relations.
Australian National University's East Asian Bureau of Economic Research and China's Centre for International Economic Exchanges jointly released a paper about cooperation on Thursday.
The report proposes joint support for the World Health Organisation to make a coronavirus vaccine available in the region, and cooperation on an international "early warning system" for disease outbreaks.
Australia and China could fast-track the business and education sector recovery by putting in place a system of health certificates for travellers.