Prime Minister Tony Abbott says Australia will speak its mind on China's territorial dispute with Japan, after his foreign minister was accused of finger-pointing over the East China Sea stand-off.
Julie Bishop expressed concern this week over China's moves to impose an air-defence zone over what it calls the Diaoyu Islands, saying the provocative action was done without consultation and could increase tensions in the region.
That strained diplomatic ties with China, which has described her comments as irresponsible.
But the prime minister says while the issue has to be treated reasonably and proportionately, it is important for Australia to speak out when its interests are at stake.
"We believe in freedom of navigation, navigation of the seas, navigation of the air, and I think there is a significant issue here - that's why it was important to call in the Chinese ambassador to put a point of view to him," Mr Abbott told reporters in Canberra on Thursday.
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"We're a strong ally of the United States, we're a strong ally of Japan, we have a very strong view that international disputes should be settled peacefully and in accordance with the rule of law and where we think that's not happening, or it's not happening appropriately, we'll speak our mind."
Mr Abbott dismissed suggestions trade relations with China could be damaged.
"China trades with us because it's in China's interests to trade with us," he said.
"I think China fully understands that on some issues we're going to take a different position to them."
Ms Bishop said Australia was not taking sides in the territorial dispute, but pointed out other countries had expressed concerns about China's actions.
"This is a matter of long-standing Australian policy. We've raised it before and the response from China was to be expected," she told Sky News.
"Australia has a key stake in the region and we would oppose action by any side that we believe could add to the tensions or add to the risk of a miscalculation in disputed territorial zones in the region."
Opposition Leader Bill Shorten said the government had a "rocky start" to foreign affairs after China emerged as a new diplomatic hot-spot as it also tried to rebuild trust with Indonesia following spying revelations.
"We accept that they've had a rocky start in foreign affairs, we want them to get it right," he told reporters in Canberra.
Chinese Ambassador to Australia Ma Zhaoxu issued a statement overnight criticising the federal government's "finger-pointing" and defending Beijing's actions.
"The move is aimed at safeguarding national sovereignty and security of territory and territorial airspace and maintaining the order of flight," he said.
"It is not directed against any specific country or target. China does not accept Australia's groundless accusations."
The United States has also criticised Beijing's establishment of the air-defence zone and Vice President Joe Biden will address the controversy during a trip to Beijing next week.
US Defense Secretary Chuck Hagel told Japanese Defence Minister Itsunori Onodera that China's move "is a potentially destabilising action designed to change the status quo in the region, and raises the risk of misunderstanding and miscalculation."
