Prime Minister Anthony Albanese will hold formal talks with Chinese President Xi Jinping on the sidelines of the G20 summit.
The bilateral meeting will be the first one-on-one meeting between the leaders of the two countries since 2016.
Mr Albanese will meet with Mr Xi on Tuesday afternoon, ahead of a range of other bilateral talks at the international summit in Bali.
The prime minister said he was looking forward to the talks, describing them as constructive.
"We enter this discussion with goodwill. There are no preconditions on this discussion," he said.
"Australia will put forward our own position."
Mr Albanese would not reveal what he planned to talk to Mr Xi about, but said it was in the "mutal interest" of both nations for the meeting to take place.
"We need to co-operate with China where we can, will disagree where we must, but will act and have dialogue in our national interest," he said.
In a keynote speech ahead of the G20 summit, Trade Minister Don Farrell said Australia needed to diversify its trade relationships, with the geo-strategic case for a European Union free trade deal having strengthened.
Senator Farrell indicated Mr Albanese would tell Mr Xi the removal of $20 billion in trade barriers would be crucial for the relationship between Canberra and Beijing returning back to normal.
While Chinese duties on barley and wine were being formally challenged through the World Trade Organisation system, Mr Farrell said Australia was open to discussing "possible off-ramps" to get to another solution.
Mr Albanese arrived in Bali on Monday afternoon and met with Indonesian President Joko Widodo, accompanied by Treasurer Jim Chalmers.
He confirmed he will have bilateral talks with the new UK Prime Minister Rishi Sunak, French President Emmanuel Macron and Indian Prime Minister Narendra Modi.
The prime minister gave a keynote speech to the B20 summit which brings together political and business leaders ahead of the G20.
He urged collaboration in all nations' interests by reducing tariff obstructions and increasing trade agreements.
"We can achieve far more together than we ever will alone," he said.
"Recovering stronger depends on recovering together."
Australia and Indonesia's peak business groups signed a new deal to expand trade, build economic opportunities and lift living standards in both nations.
The Business Council of Australia (BCA) and Indonesia's KADIN signed the agreement beside Mr Albanese.
BCA chief Jennifer Westacott said it was a "welcome reset" on foreign policy.
"The government has rightly made our relationship with Indonesia a priority, and businesses from both nations agree," she said.
"We welcome this chance to build relationships and explore opportunities for two way investment that creates jobs, gets new industries off the ground and makes our region stronger."
Tackling climate change will also feature heavily during the summit.
The prime minister urged governments and businesses to invest in clean energy sources and spruiked Australia's role in the global transition to renewables.
"We know Australia can be a renewable energy superpower and we are working to grow our clean energy export industry," he said.
"We are committed to co-operating with other nations to help reduce their emissions, grow their economies and improve living standards."
Global recovery from the COVID-19 pandemic and taming inflation impacting economies will also be key themes of Mr Albanese's speech.
Greens leader Adam Bandt said there needed to be a broad review into whether trade deals delivered for Australia, and he wanted to see a de-escalation in tensions with China for the region.