Australia and China have vowed to improve military-to-military lines of communication, including a new maritime affairs dialogue to avoid dangerous confrontations at sea or in the air following “candid” talks between Prime Minister Anthony Albanese and Chinese Premier Li Qiang.

Australian tourists will also enjoy visa-free entry to China, while business people will be able to receive multiple entry visas, as the two leaders pledged to strengthen the free trade agreement.

The two leaders also announced a revamped economic strategic dialogue, which Mr Li said would provide avenues to address trade disputes and ensure a “non-discriminatory” business environment, a swipe at what Beijing alleges is unfair curbs on Chinese foreign investment.

However, Mr Li offered no comfort to lobster producers, which is the remaining industry suffering a de facto ban under Beijing’s now abandoned campaign of economic coercion.

Despite that, the leaders both offered warm sentiments. “Australia and China have renewed and revitalised our engagement,” Mr Albanese said.

“This relationship is on the right track of steady improvement and development,” Mr Li said.

Hours after a Chinese vessel and Filipino supply ship collided near the disputed Spratly Islands in the South China Sea in the latest high seas clash, Mr Albanese confirmed he raised recent near misses between Australian and Chinese militaries operating in the region.

Last month, a Chinese fighter jet dropped flares in the flight path of an Australian navy helicopter while it was patrolling international waters in the Yellow Sea. And in October, navy divers suffered minor injuries when a Chinese warship pulsed sonar waves while they were in the water.

“One of the very practical measures that we spoke about was improving military-to-military communication so as to avoid incidents,” Mr Albanese said.

“Obviously, what will happen is that officials will go away and we’ll have that discussion about how that can be implemented in practice.”

The formal joint statement issued after the meeting said leaders would “continue or expand … political dialogue, including through the Defence Strategic Dialogue and Defence Coordination Dialogue, and convening an initial session of a bilateral Maritime Affairs Dialogue”.

While Australia’s Defence Force chief used to meet their Chinese counterpart, that was put on hold as part of the broader diplomatic freeze Beijing imposed.

There are no immediate plans to reactivate that, with the initial focus on frequent conversations between two-star ranked officers, the equivalent of a major-general, rear admiral or air vice marshal.

Mr Albanese said he also raised the suspended death sentence handed to pro-democracy Australian writer Yang Hengjun, Chinese foreign interference in Australia, human rights, regional security and the need for China to press Russia to end its war with Ukraine.

“I have had constructive discussions with Premier Li and those discussions have produced results,” Mr Albanese said when asked whether China’s leadership can be trusted.

“We’re not transactional in how we deal with that. We put forward our view and I must say that the premier also puts forward his view.”

Speaking through an interpreter, Mr Li said China and Australia could seek common ground while shelving their differences.

“We also had a candid exchange of views on some differences and disagreements, agreed to properly manage them in a manner befitting our comprehensive strategic partnership,” he said.

“We both stressed the importance of maintaining communication and coordination to jointly safeguard peace and prosperity in the region and beyond.”

In an attempt to encourage people-to-people links, Mr Li said Australia would be included in China’s visa waiver program. Details were unavailable, but it is understood to be similar to what Mr Li announced for New Zealanders, where tourists would be able to travel to China for up to 15 days without requiring a visa.

The leaders also announced the two countries would implement reciprocal access to multi-entry visas of up to three to five years for business, tourism and visiting family members.

Five memorandums of understanding were signed following the meeting, covering the free trade agreement; expanding economic dialogue; co-operation on climate change; education and research including quality assurance for foreign students; and collaboration and exchanges in the arts.

However, details of the agreements will not be released until Mr Li wraps up his visit in Perth on Tuesday.

After China effectively put Australia in a diplomatic freeze during the Morrison government’s term, Mr Li said both countries would “fully resume various areas of institutional dialogues”.

“We will make good use of such dialogue mechanisms such as the Strategy Economic Dialogue, the joint Ministerial Economic Commission and the Free Trade Agreement Committee to address each other’s economic and trade concerns and provide a fair, open and non-discriminatory business environment for our companies,” Mr Li said.

“We will leverage our respective strengths to expand cooperation in energy, mining, new energy vehicles, green development and digital economy.”

With China eager to join the trans-Pacific free trade pact, Mr Li insisted China was committed to the World Trade Organisation and multilateral rules-based trading system, despite the targeting of $20 billion of Australian exports with punitive tariffs and bans between 2020 and 2022.

Emphasising the importance of dialogue, Mr Albanese said China had a “vital role to play in keeping our region open, stable and prosperous”.

“Australia advocates that we should all work together to promote a regional balance where no country dominates, and no country is dominated,” the prime minister said. “A region where countries large and small operate by the same rules – rules that we have all had a say in shaping.”

Opposition Leader Peter Dutton, who met separately with Mr Li late on Monday, said in his speech at the state lunch that the goodwill of the visit gave “hope that tensions of recent years can ameliorate”.

“Citizens across both of our countries share aspirations for peace and prosperity – for themselves and of course, their families,” Mr Dutton said.

“In pursuit of those aspirations, we have a responsibility to ensure that all engagements between our two countries are conducted with due care.”

Outside Parliament House, about 1000 pro-China supporters and anti-China protesters were separated by plastic barricades and police, although occasional tussles broke out and one person was arrested for breaching the peace.

Protesters rallied against China’s treatment of the Uighur ethnic minority, Tibetans and Falun Gong practitioners and crackdown on freedoms in Hong Kong. (AFR)