China is demanding it be allowed to import Chinese workers into Australia to work on projects funded by Chinese investors under a proposed free trade agreement, sparking concerns within the Abbott government of a backlash, according to reports.

An Australian Financial Review report says that the government is resisting the move and is seeking a way around the issue by targetting 457 visas towards projects that the Chinese want to build that require skills that cannot be obtained in Australia as it pushes to land a free trade deal with China at the Group of 20 meeting in November.

China's Premier Li Keqiang talks to Tony Abbott during the Prime Minister's visit to China. Credit:Reuters/China Daily

Chinese President Xi Jinping will attend the G20 meeting and it is believed that imported labour and investment remain the two obstacles in signing off on a deal.

Prime Minister Tony Abbott has already changed his previous opposition to Chinese state-owned businesses investing in Australia and signalled he would offer these enterprises special treatment by removing or changing the requirement that all investments have to be approved by the Foreign Investment Review Board.