Wine producers, exporters and the Albanese government are cautiously tipping their glasses over the widely expected decision by Australia's largest trading partner to improve diplomatic and trade ties by abolishing heavy tariffs against Australian wine.

"I think it's fantastic. It should never have happened in the first place," Ken Helm from Murrumbateman-based Helm Wines told The Canberra Times. "It is very positive for the Australian wine industry and what's positive for the Australian wine industry is a rub back on the Canberra wine district."

"It's been pretty tough for the industry. And also we've seen also a downturn in visitors to the winery."

Only a handful of Canberra region winemakers are big enough to export, but there is expected to be a trickle-down effect for smaller, boutique operations.

"The major companies will now go back onto the export market and start moving their wine into China, which they've got large quantities. They won't be flooding the domestic market and competing for our market," Mr Helm said.

'It opens up a bigger market for us premium producers. We'll get more opportunities in top-end restaurants and top-end premium independent liquor stores."

The Commerce Ministry in Beijing said on Thursday it was "no longer necessary" to impose anti-dumping duties and other levies on imports of Australian wine, while Australia was dropping its case against China at the World Trade Organisation.

It means an export market, worth $1.3 billion a year to Australia at its 2020 height, is open again. It is one of the last of the full gamut of $20 billion worth of trade barriers imposed when various diplomatic spats with the Morrison government put Australia in the deep freeze. Chinese trade barriers remain on Australian rock lobster and beef.

The turnaround is welcome news to a wine industry, at harvest time, that is being hit on several fronts, including unpredictable weather.

"We had COVID. We've had a couple of really bad seasons. But in saying the wine that comes out has been really, really good. So I want to be quite positive about that, but it is tough financially. Absolutely," Sapling Yard winemaker Carla Rodeghiero told The Canberra Times.

"We've seen the cost of living have an effect as well. We're super premium here in Canberra. So we can't produce wine at low cost. It just costs a lot of money."

"Once the purse tightens at home with mortgages and costs, well, then you're probably going to buy less good quality wine. That's just the way it is. Something's got to give, doesn't it?"

Red wine and red grapes are in oversupply at the moment.

"It's going to take some time," Ms Rodeghiero said. "Given that there is an oversupply of red grapes in the market domestically because of what happened with China, we may see in the next couple of years, we might see prices pick up and things come back a little bit more to normal."

The China market has changed in the past three years with new entrants filling the Australian gap. New Zealand, Chile, Argentina, South Africa have entered, while Australian wine makers have found new places for their products. The Chinese government has also been supporting its own domestic wine industry.

Wamboin wine exporter Greg Corra, from Inland Trading, exported about 10 per cent of product to China before 2020, worth $2.5 million annually. Smaller, alternative markets in South Korea, Nepal and Bhutan have been developed amid falling global demand for Australian wines.

He said people "are dreaming" if they think the local wine industry is going to immediately turn around.

"We were recently offered 27,000 litres of wine, to bring in tankers, pick it up, carted away free of charge," he said.

"Now, there was no other option for the group because they had vintage on the way. They had tanks full. What were they going to do? And the number of companies particularly in the Riverland region that are in a lot of trouble. It's quite unbelievable.

"I think we're a long way of getting anywhere near back to where we were."

Mr Corra said he needs certainty before he can commit to the China market again.

"Why would you go into a market that has caused massive, massive grief? And they could easily do it again," he said.

Assistant Trade Minister Tim Ayres said the decision should give more confidence to the Australian wine industry, but cautioned that winemakers will need to diversify.

"It's never good to put all of your eggs in one basket in business terms. That's the message and that's why from the outset, the government's approach here has been to urge a diversification message to Australian industry," he told reporters. "That means diversifying our markets overseas, but it also means diversifying the goods and services that we offer to our overseas partners."

"It's not possible to predict the course of events here. I'd like to see booming Australian wine exports into China, but also more broadly across the region."