Despite having China as its topmost trading partner, Australia's ambition to have a free trade agreement (FTA) signed with its fellow Asian country continued to get derailed, even after almost a decade-long negotiations. This time, the talks got hindered on China's insistence that Australia lift its foreign investment restrictions on state-owned enterprises.

China specifically wants Australia to lift the threshold on reviewing asset acquisitions by foreign states from zero to $1 billion.

"We can't do that, the Australian community would not accept that," Craig Emerson, trade minister, told a global food conference in Melbourne on Thursday.

"China is saying, at this stage, non-negotiable, you've got to go from zero to $1 billion ... so that's where we're stuck."

The FTA talks with China has been going for eight years now. Once completed and ongoing, Australia expects to gain additional incomes of A$146 billion ($145.5 billion) in the next 20 years.

Denis Napthine, Victorian premier, who was also present at the global food conference, said Australia should make the FTA with China its number one priority.

"These negotiations have been going on for eight years now, that's far too long," Mr Napthine said.

Mr Emerson, for the meantime, said he had proposed a mini-package that would potentially open and grant some improved access without the need yet to enter into a full agreement.