China and Papua New Guinea held Friday talks on a free-trade deal in light of Chinese Foreign Minister Wang Yi finishing up his tour of the Pacific Islands with a stop in the Oceanian island-nation.

Papua New Guinean Prime Minister James Marape underlined that discussions in the country's capital, Port Moresby, heavily revolved around economic cooperation and a trade agreement that has long been on the table of negotiations with China.

Beijing is already a major investor in Papua New Guinea, and it is a huge market for the island's gas, minerals, and timber, among other resources. However, China is still not Papua New Guinea's leading trading partner; Australia holds that position, and Beijing is fighting over it with Canberra.

Marape wants to make a shift from the country's traditional economy of trading primary materials; he wants to focus the economy on the more lucrative finished products, inviting more Chinese investments in the island and saying work was underway on a trade deal with the Asian giant.

"China and Papua New Guinea officials are going through tidying Chinese-PNG free-trade arrangements," Marape told journalists.

"The specifics of the free-trade arrangement are being finalized as we go through, so that Papua New Guinea interests are not suppressed or harmed, but maintained and, in fact, augmented," he explained.

Talks about a trade deal between China and Papua New Guinea come in light of tensions over the Asia-Pacific region, with Beijing on one end and Canberra and its western allies on the other racing for influence over the Pacific Islands.

The two sides, however, have signed a series of agreements on investment in "green development", COVID-19 assistance, aid, and health care.

China's trip across the Pacific prompted Australia's new Foreign Minister, Penny Wong, to make swift visits to three Pacific island states in a bid to revive decades-long alliances.

The Chinese tour was announced ahead of a meeting of US, Japanese, Australian, and Indian leaders at the Quad summit in Tokyo, with the goal of countering China's growing economic and military clout in the region.

Wang's 10-day tour has seen the Pacific Islands reject a regional deal that would have given China and the islands exchanging expertise in areas of policing, cybersecurity, and maritime surveillance.

Speaking in Tonga on Friday, the island's Prime Minister, Siaosi Sovaleni, stressed the importance of ties with Australia.