Our thawing China relationship is transactional diplomacy

The Australia-China relationship is in a much better place than in 2020 after a call for an independent international inquiry into the origins of COVID-19, at least in part because the Morrison government would not back down. While the call by then-foreign minister Marise Payne was justified - and many questions are still unanswered - this country paid a high price for its temerity.

Consequential trade bans were introduced, Australian journalists had to leave China for fear they would be detained, Cheng Lei - an Australian journalist working for Chinese media - was detained, and senior CCP officials and ministers stopped taking our calls. Australia was put in the freezer.

So what has changed? On Monday Premier Li effectively echoed Penny Wong and Anthony Albanese's oft repeated line "we will cooperate where we can, we will disagree where we must, and we will engage in our national interest".

Premier Li's take on the Albanese-Wong doctrine on Monday was: "We ... had a candid exchange of views of some differences and disagreements and agreed to properly manage them in a manner befitting our Comprehensive Strategic Partnership."

This is the language of realpolitik and transactional diplomacy. Two nations with very different values, systems and aspirations, but many mutual interests, have agreed to "go along to get along". That is as it should be. It has ever been thus.

What happened at the turn of the decade was that Beijing, awash with newfound prosperity and economic clout, badly overestimated its ability to pressure other nations - including this one - into falling into line with its dreams of a regional hegemony.

Australia was the mouse that roared. We sought new alliances, reaffirmed longstanding relationships and set an example other nations including Canada where quick to follow.

AUKUS, the "quad" and diversification into other markets - albeit at significant inconvenience and expense - saw this nation weather the storm.

The election of the Albanese government just over two years ago gave the Chinese leadership, which realised its tactics had backfired, the opportunity to reset. It wanted to return to the status quo ante of "business as usual".

Or, as Premier Li put it: "Both countries attach great importance to our relationship ... this relationship is on the right track of steady improvement and development."

"The right track". That's as close as we are ever going to get to an apology from the Middle Kingdom for its economic disruption to Australian farmers, wine producers and the fishing industry and the like. Unravelling the diplomatic speak, it's actually a significant concession by China it might have been on the "wrong track" before it swapped "wolf warrior diplomacy" for panda politics.

While Monday's developments are very welcome, it would be wrong to assume it is blue skies and sunshine from here on out.

Premier Li, for example, may have been referencing Foreign Minister Wong's statement on Sunday that Australia is now in "permanent contest" in the Pacific during his visit.

"Both sides care about and support the development of Pacific island countries and will step up communication and dialogue to explore ways to better help development," he said.

With a high-powered Australian delegation poised to fly to Papua New Guinea this week, it is clear that particular struggle for hearts and minds will continue.