Beijing has opened the door for bilateral talks to begin resolving trade disputes that have crippled $20 billion of Australian exports, if the Albanese government abandons its World Trade Organisation challenges, China’s top diplomat in Australia has revealed.

Ambassador Xiao Qian said Australian and Chinese trade negotiators in Geneva had begun discussing the possibility of Australia dropping its WTO challenge to punitive tariffs on barley and wine, saying such a move would be a “good idea”.