Albanese is on his second visit to China as prime minister, seeking to bolster recently stabilised trade ties even as geopolitical tensions remain high.
Relations between Beijing and Canberra have charted a bumpy course over the past decade, a period marked by repeated disagreements over national security and competing interests across the vast Pacific region.
Ties improved in December when China called off a ban on imported Australian rock lobster, removing the final obstacle to ending a damaging trade war waged between the countries from 2017.
Albanese met Xi in the Great Hall of the People and said he welcomed "the opportunity to set out Australia's views and interests".
"Australia values our relationship with China and will continue to approach it in a calm and consistent manner, guided by our national interest," Albanese, the leader of Australia's centre-left Labor government, said.
"It's important we have these direct discussions on issues that matter to us and to the stability and prosperity of our region. As you and I have agreed previously, dialogue needs to be at the centre of our relationship," he said.
Xi, in turn, hailed the "benefits" of improved ties between China and Australia, saying the relationship had "risen from the setbacks and turned around".
"No matter how the international landscape may evolve we should uphold this overall direction unswervingly," he said.
Albanese told reporters after meeting Xi that the two countries had "strategic competition" in the region but continued to engage in order to "support peace and security".
- Key trading partner -
China is one of Australia's most important economic partners, accounting for nearly one-third of its total trade.
Albanese is accompanied on his visit by a delegation of key business leaders who will attend a roundtable of CEOs in Beijing.
His trip will last until Friday and will also take him to the southwestern city of Chengdu.
Albanese is also accompanied by a travelling media pack, members of which said they were briefly surrounded by security guards and told to hand footage to police.
A small group of reporters were filming outside Beijing's Bell and Drum Towers when they were stopped by security guards.
National broadcaster ABC's reporter Stephen Dziedzic said he was "quickly surrounded by a number of security guards, who said they were going to call the police and we didn't have permission to leave".
"We had the necessary permissions, we had the right visas, but nonetheless perhaps that hadn't been passed all the way down the chain," he told ABC.
Australian broadcaster SBS, which also has a correspondent on the trip, reported that journalists were briefly surrounded and told to hand footage to police.
The group was allowed to leave after Australian diplomats intervened, the ABC and SBS reported.
Albanese's trip also comes as China's sweeping territorial claims ruffle feathers in the region, particularly pertaining to the South China Sea.
Another key point of contention is the fate of northern Australia's Darwin Port, whose Chinese-owned controller could be forced to sell it to a local buyer by Albanese's government.
Albanese said he raised with Xi the case of Australian writer Yang Hengjun, who has been detained in China since 2019 on spying charges and was given a suspended death sentence.
He warned against expecting an immediate outcome, telling reporters "that's not the way these things work" but instead required "patient, calibrated advocacy".
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