Immigration Minister Peter Dutton insists it is appropriate for Australia to stand up to foreign states who it believes is having an undue political influence on the country, whoever they are.
Prime Minister Malcolm Turnbull, who introduced anti-foreign interference laws last week, drew a stinging rebuke from China after suggesting they were aimed at the Asian giant.
But Mr Dutton said it was a measured response from the advice from ASIO.
"It's always important for nations like Australia ... to stand up and for people to understand the boundaries, the area of engagement that are acceptable and those which aren't," he told Sky News on Sunday.
Asked whether he was concerned China might take retaliatory economic action against Australia, Mr Dutton said: "I don't think that would be appropriate."
He said Australia has strong ties with China, such as inbound tourism, and people send their children to be educated because Australia is a "safe place".
"We have a very strong relationship with China and that will long be the case," he said.
Chinese foreign ministry spokesman Geng Shuang on Friday said he was "shocked" by what Mr Turnbull had said in parliament the day before.
"We express strong dissatisfaction at this and have already lodged solemn representations with the Australian side," Mr Geng told a daily news briefing in Beijing.
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The prime minister on Saturday said Chinese people stood up for their sovereignty and expected Australians to do the same.
"That is why we respect each other," Mr Turnbull said.
"That is why they respect me and my government."
