Prime Minister Malcolm Turnbull has urged China's leadership to speed up the environmental testing of coal imports amid concerns from Australian exporters that the new standards were acting as a barrier to trade and driving down an already depressed price.
During the talks, Chinese Premier Li Keqiang assured the Prime Minister that China's economy would continue to grow at "about 7 per cent" and that there would be an ongoing demand for Australia's resources, including coal, even as his economy became more consumption driven.
Mr Turnbull pressed the case for ongoing Australian coal exports when he met Mr Li on the sidelines of the East Asia Summit, in the Malaysian capital of Kuala Lumpur, for broad-ranging talks.
China has imposed new standards on the coal it uses for power generation to try to cut emissions of sulphur dioxide, nitrogen oxides, particulate matter and mercury, and reduce the nation's chronic and severe air pollution.
Mr Turnbull went in to bat for Australian coal, pointing out its high quality and stressing Australia wanted to avoid "delays" in the annual $9 billion in coal exports to China caused by the new testing regime.
"China has imposed – and we respect their doing so – strong environmental limits, regulations on coal, principally directed at reducing the level of sulphur in the coal that they burn to counter pollution," he said after the talks.
"Australian coal generally has very low sulphur, so there's no bad news in that for Australian coal exporters.
"There have, however, been some administrative difficulties in a way that the testing has been managed and the Premier Li Keqiang and I had a very good discussion about that and how we may be able to expedite the testing so that Australian coal exporters and, indeed, Chinese importers of Australian coal, will not be inconvenienced or have their activities disrupted."
Mr Li accepted these concerns when he "acknowledged the high quality" of Australian coal, officials said, and gave a commitment towards "streamlining" the testing process.
Three weeks ago BHP Billiton, the world's biggest exporter of metallurgical coal, complained that China's import-coal quality testing regime was a "significant impost" on free trade and that some rivals were being forced to sell rejected cargoes at "distressed" prices.
Shaun Verner, BHP's vice-president of marketing for coal, told Fairfax Media the testing was hurting sentiment and making it "much more difficult" and slower to sell tonnes into China.
BHP had not had a cargo rejected, but Mr Verner said, "Our understanding is that where some cargoes have been rejected, and we have heard through the market that there have been a few, they have had to be reloaded and resold as distressed cargoes in other markets.
"If you take the general market situation, and price where it is, the risk of having a cargo rejected is not something that people are willing to bear."
Trade Minister Andrew Robb has been pushing the Chinese to conduct the testing in Australia.
Also discussed in the talks was the disappearance of Malaysia Airlines Flight MH370 in March 2014, which remains a significant issue in China. After the talks, China announced it would give another $20 million to extend the search for the missing plane.
Both Mr Turnbull and Mr Li also assured each other that their respective domestic processes were in train to ratify the China-Australia Free Trade Agreement and have it in force before Christmas.