But in an analysis for the Lowy Institute, Australia's former ambassador to China Graham Fletcher noted several wildcards - such as Chinese military action in Taiwan - could still disrupt the "modest new normal" of the relationship.
The change in government at the 2022 federal election acted as a circuit-breaker in increasingly fraught dealings between the nations, although they had still been marred by intimidatory military encounters involving Chinese forces, he said.
Beijing sparked widespread international condemnation over its launch of a ballistic missile into the South Pacific in July following the signing of a landmark mutual defence alliance between Australia and Fiji.
The Albanese government sought to stabilise relations with China after diplomatic tensions peaked during the COVID-19 pandemic under then-prime minister Scott Morrison's leadership.
Beijing slapped $20 billion in trade sanctions on Australian exports, measures that have slowly been wound back.
China is Australia's largest trading partner and is the destination for about a third of the nation's exports.
Mr Fletcher said Beijing had not given up hope of drawing Australia closer into its orbit, while Canberra was more focused on consolidating its current relationship.
"But this relationship is unlikely ever to become genuinely close - like the relaxed, intimate fellowship Australia enjoys with like-minded partners elsewhere in its region and beyond," he said.
"The gulf in terms of diverging world views and national security agendas is simply too wide.
"It would be pointless for Canberra to pursue such a goal; it recognises this and is realistic."
The "mismatch" of world views made the relationship vulnerable to disruption, with key risks including another round of serious disagreements or the cataclysm of a conflict, including the use of force against Taiwan.
"An upheaval or conflict is always a possibility, though not in my opinion a strong one at present," the former diplomat said.
China considers Taiwan, a self-governed democracy, part of its territory.
Australia would be on firmer ground when facing China if policies had cross-party support and politicians did not "seek to exploit difficulties for domestic advantage", Mr Fletcher said.
"Bipartisanship produces policy consistency and limits China's ability to play games within the Australian system," he said.
Mr Fletcher was Australia's ambassador to China from 2019 to 2023 and led the negotiating team in 2014 that helped seal a free-trade agreement between the nations.
