REFILE-UPDATE 2-Australia PM welcomes dialogue with China's Xi in first meeting since 2016

(Corrects Chinese leader's name in first paragraph, Jinping, not Jingping)

By Lewis Jackson and Alasdair Pal

Nov 15 (Reuters) - Australian Prime Minister Anthony Albanese said he discussed trade, consular and human rights issues in a meeting with China President Xi Jinping at the G20 summit on Tuesday, the first meeting between leaders of the two countries since 2016.

"This was another important step towards the stabilisation of the Australia-China relationship," Albanese said.

"We are always going to be better off when we talk to each other, calmly and directly. There are many steps yet to take. We will cooperate where we can, disagree where we must, and engage in our national interest."

The meeting takes place as both countries work to improve relations overshadowed by disputes over trade, Taiwan, human rights and the origins of the COVID-19 coronavirus outbreak.

Australia's relations with China began to sour in 2017 when it introduced laws to deal with what it said was Chinese interference in Australian politics.

Beijing was also angered by Canberra's 2018 decision to ban Huawei from its 5G network on national security grounds, a decision followed by other Western nations.

Two Australian journalists, Cheng Lei and Yang Hengjun, are also in jail in China awaiting sentences after closed-door national security trials.

Tuesday's meeting is significant for ending China's long freeze on all high-level political dialogue, without Australia backtracking on any of its policies, Richard Maude, executive director of the Asia Society Australia told Reuters. (Reporting by Lewis Jackson and Alasdair Pal in Sydney; Editing by Angus MacSwan and Tom Hogue)