"We have had a good start, ever since the new Labor government came into power, but it's only a good start," Xiao Qian, China's ambassador to Australia, said on Wednesday.
It is "imperative" for China and Australia to resolve their differences, with the global economy facing high inflation, a weak recovery and tight supply chains, he said in an address to the National Press Club.
Recent face-to-face ministerial meetings had helped, Mr Xiao said.
China has restricted imports of coal, wine, beef, cotton and seafood in recent years and is moving to exert greater control over the prices paid by its steelmakers for iron ore, Australia's top export.
China has also accused Australian farmers of dumping barley, and challenged duties imposed on China's wind towers and other equipment, in a move the former coalition government said was "petty".
"We're ready to sort it out and solve this dispute through the WTO with the Labor government," the ambassador said.
There is an opportunity for a "possible reset" but there are many issues on the table, he said.
The ambassador called out the prior government's block on communications giants Huawei and the ZTE, saying it had spooked other Chinese companies.
And some companies who may have invested in Australian mining and agriculture have opted for Latin America and Africa instead.
"I'd love to have more investment from China in Australia and I would like to see an improvement of the environment for the businessmen to do business in this country," he said.
He said Australia has been a "long-term stable supplier" of mineral and energy resources for China, and his country has been a competitive commodity supplier for Australia.
"When we cooperate, we both win. When we don't, we both lose," he warned.
China has been Australia's largest trading partner for many years, needing coal and iron ore to feed economic expansion, and is a top source of tourists and international students.
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