Xi Jinping, on the first high-level trip by a Chinese official to Australia since Australian iron ore executive Stern Hu was jailed, is set to focus on economic issues, including a plan for a 40 percent tax on mining profits.

"Our two sides should build on our current strong relationship," Vice-President Xi said through an interpreter late on Saturday.

"In the next few days I look forward to meeting your leaders, senior officials and people from many other sectors for further exchange of views on how best to further advance the China-Australia relationship."

Xi's visit is the first since Australian-passport holder and Rio Tinto mining executive Hu was jailed in Shanghai in March and the resumption of talks on a free-trade agreement.

But it is the mining tax that is likely to deeply engage Xi, who is expected to succeed President Hu Jintao in 2013, when he meets Mandarin-speaking Prime Minister Kevin Rudd for formal talks in Canberra on Monday.

The tax on so-called "super profits", which resources companies are furiously opposed to, has raised concerns that it could increase the price of raw materials such as iron ore which China needs for its development.

"Chinese companies are interested to see the development of the resource tax. They will express that," Chinese ambassador Zhang Junsai said last week.

"As long as they see a stable political situation and legal framework (and) they know they can make money here, they don't have to worry," he told The Australian newspaper.

Zhang said Xi's visit signalled that the Beijing-Canberra relationship had moved past ructions caused last year after the arrest of Hu and his subsequent jailing on bribery and trade secrets charges.

Stern Hu, former head of Rio's Shanghai office, was jailed for 10 years for taking kickbacks from Chinese steel firms and stealing corporate secrets.

Diplomatic tensions were further strained after exiled Uighur leader Rebiya Kadeer visited Australia in a trip which was strongly criticised by Beijing, which claims she is a terrorist.

Tight security surrounded Xi as he arrived in Melbourne on Saturday, as he began the final leg of a four-nation tour that included Bangladesh, Laos and New Zealand.

The tour was last week marred by a scuffle between Xi's entourage and a New Zealand legislator who was waving a Tibetan flag outside parliament in Wellington.

In Melbourne on Sunday Xi was met by about 50 protesters from the Falun Gong spiritual movement, along with some 30 Chinese supporters, as he arrived to open a traditional Chinese medicine institute.

Another 60 Falun Gong protesters gathered outside Xi's Canberra hotel later Sunday, as the vice-president was welcomed to nearby Parliament House by centre-left Labor prime minister Rudd.

Xi will address the Australia China Trade and Economic Forum lunch on Monday but his visit also allows for cultural experiences, with the vice-president watching an Australian Rules football match on Saturday and set to tour part of the Kakadu National Park in the Outback Northern Territory during the week. His visit concludes on Wednesday.

Australia's trade relationship with China was last year worth 85 billion dollars (74 billion US), making the Asian powerhouse the country's top trading partner.

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