Mr Albanese arrived in Shanghai on Saturday evening AEDT, becoming the first Australian prime minister to visit Australia's largest trading partner in seven years.
Though the government has made strides in improving the relationship over the last 18 months, trade minister Don Farrell - who is accompanying the prime minister on the trip - says the partnership is "not what it was a number of years ago".
But Assistant Foreign Affairs Minister Tim Watts says the government's efforts are not about resetting the relationship, but rather stabilising it.
"It's not possible to turn back time. We can't reset the relationship to what it was back in 2016," he told Sky on Sunday.
"What a relationship between Australia and China looks like in that new world is going to mean different things to China and to Australia.
"We need to use all of our Australian tools of statecraft, across defence, across diplomatic capabilities, across our economic capabilities, and co-ordinate and align them in the pursuit of our own interests."
Opposition spokesman for home affairs James Paterson says Australia should not seek a reset, citing China's human rights record.
"We do need to be clear-eyed," he told Sky News.
"We now have the benefit of understanding exactly what the Chinese government has done in Xinjiang to the Uighur people, we've now seen what they've done in Hong Kong, we know what they've threatened to do against the people of Taiwan.
"If we were to ignore that in the pursuit of a reset, that would be fundamentally damaging to our interests."
After receiving a red-carpet welcome by China's top diplomat in Australia Xiao Qian and Australia's ambassador to China Graham Fletcher, Mr Albanese attended the opening banquet of the China International Import Expo.
Prime Minister Anthony Albanese wants an "open and respectful dialogue" with China.
Speaking after the dinner, which was hosted by Chinese Premier Li Qiang, the prime minister reaffirmed the importance of ties with China.
"It is in Australia's interests to have a positive and constructive and open and respectful dialogue with our major trading partner," he said.
"And that's what I hope to achieve over the coming days where I'll be meeting with President Xi, Premier Li and other leaders here in China."
Mr Albanese will attend the trade show on Sunday, where about 200 Australian companies will be represented.
Pleased to be in Shanghai, marking the first visit to China by an Australian Prime Minister since 2016. — Anthony Albanese (@AlboMP) I look forward to continuing the dialogue between our two countries over the coming days. pic.twitter.com/Z92aIeFeGQNovember 4, 2023
Chinese President Xi Jinping is expected to appeal to Mr Albanese for Australia's support for his country's bid to join the 12-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
But the prime minister won't back Beijing's application and is expected to reiterate that the bloc has the highest standards for entry, and will need the unanimous support of members to allow new nations in.
China believes its application to join the trans-Pacific trade agreement is crucial to upgrading economic co-operation with Australia.
Beijing imposed trade bans worth $20 billion on Australian products, but that has since been reduced to $2 billion.
China is reviewing its sanctions on Australian wine worth $1.2 billion, with the bans expected to be lifted at the end of a five-month process that's underway.
Bans remain on rock lobster exports and some abattoirs.
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