Prime Minister Anthony Albanian informally met Chinese Prime Minister Li Keqiang at a gala dinner for world leaders.
It is an important development as work is underway behind the scenes to meet with Chinese President Xi Jinping.
The dinner was hosted by King of Cambodia, Norodom Sihamoni and Prime Minister Hun Sen, for leaders attending the East Asian and ASEAN summits in Phnom Penh.
Mr Albanese and the Prime Minister sat side by side at the main table and had a short conversation.
It was the first time he met Prime Minister Li and the couple spoke about the 50th anniversary of diplomatic relations between their two countries.
Albanian sat next to Indonesian President Joko Widodo at the gala and also spoke with US President Joe Biden, Canadian Prime Minister Justin Trudeau and Japanese Prime Minister Fumio Kishida.
Trust, communication and collaboration are at the heart of Mr. Albanese’s approach to meeting his fellow world leaders.
He has pledged to uphold the ideals of peace and freedom and said this would be done by building trust between nations.
But China’s sanctions against Australia and the tightening of security muscles in the region are important issues the prime minister wants to address.
Xi, who has not had a formal meeting with an Australian leader since Malcolm Turnbull in 2016, has confirmed he will meet Biden in Bali.
Whether he and Mr Albanese will do so remains an open question.
“Dialogue is a good thing. Understanding comes from dialogue and we need more, not less, in today’s world,” said Mr. Albanese.
“We know there is strategic competition in this region and that is the context of every meeting that will take place between the United States and China.”
Mr Albanian said he was waiting for the conclusion of a meeting with Mr Xi and looks forward to a constructive dialogue.
“I think there’s a lot of goodwill here, especially from Australia,” he said.
“I have no reason to believe that there is no goodwill on the Chinese side either.”
On Sunday, the prime minister is expected to deliver two speeches at the summits and later visit an exhibition in Phnom Penh with other world leaders.
“This is an opportunity for us to build relationships in our region so early in the new government’s tenure,” he said.
“I’m really glad it’s so constructive and the dialogue is so positive.”
It will be the Prime Minister’s last day in Phnom Penh before traveling to Bali for the G20 summit.