After three icy years, Anthony Albanese’s meeting with outgoing Premier Li Keqiang is the first major step towards normalised relations with China.

But all eyes are now cast forward, to an expected meeting with President Xi Jinping but also to what re-established ties will mean for two countries linked by trade and strategic contest.

The two leaders (Mr Li is China’s second most powerful man) smiled broadly and chatted in translation about history after Mr Li came over to say hi at the East Asia/ASEAN summit.

Earlier this year, the initiative was Mr Li’s again when he sent the new PM a surprise note expressing congratulations soon after the election and hoped strained ties could improve in this, the 50th anniversary of Gough Whitlam’s recognition of China.

Anthony Albanese chats with Chinese Premier Li Keqiang during a gala dinner at the ASEAN summit. Photo: Facebook

Professor James Laurenceson of the UTS China Relations Institute says that even their casual encounter, but especially one followed by a formal meeting with the President, will substantially improve ties between nations.

“It’s confirmation that Australia is out of the diplomatic deep freeze,” he said, noting that China’s ambassador had already been making entreaties.

“And it’s the meetings between leaders that will send a decisive signal throughout the Chinese bureaucracy.”

Relations, he expects, will return to a point where they are regularly tested by issues such as the likely retention of trade sanctions and the treatment of Australian nationals in Chinese prisons.

That Mr Albanese and Penny Wong managed to improve ties without conceding any ground on Labor’s promise to keep to conservative foreign and security policy is already remarkable, he said.

Tweet from @AlboMP

“Events this year have served as a corrective to the view that diplomacy doesn’t matter as long as differences in interests remain,” he said.

“None of the differences disappeared.

“Faced with Beijing’s bad behaviour, the loose talk of the Morrison government made things worse and it was an own goal.”

Senator Wong and her Chinese counterpart’s productive meetings laid the path for this week but she released a strong statement on the decline of human rights in Hong Kong on the 25th anniversary of its handover this year.

Cambodia, the site of Saturday’s dinner, is the latest example of China’s strategic interests and the site of a new – albeit undeclared – People’s Liberation Army base in South-East Asia that has America worried.

Mr Li was a highly influential economist, with 10 years at the top of politics; his departure is often styled as the coming to an end of a distinctive type of Chinese political leader. 

Better relations with South-East Asia had always been this government’s stated chief priority before the election and, along with a major international meeting, will be the subject of the PM’s nine-day trip.

Mr Li has been an enthusiastic proponent of closer ties with countries such as Vietnam.

Mr Albanese is also seeking a meeting with Mr Xi in Bali, where he will travel next for the G20 forum and where Vladimir Putin will be a no-show.

The summit’s host, Indonesia, has a proud history of free and active diplomacy and has had close relations but also no end of ups and downs with Australia.

It is in well in China’s economic orbit but not in its thrall.

Which about sums up what makes Australia (and China) so interested in the region.