Defence Minister Marise Payne says the Turnbull government won't take a backwards step from protecting Australia's interests as tensions flare with China.
Prime Minister Malcolm Turnbull has admitted there is friction between the two countries, after concerns were aired in Chinese media about the federal government's new foreign interference laws.
Senator Payne stressed the legislation was not directed at any specific country.
"We continue to maintain a considered defence engagement and relationship (with China)," the minister told ABC radio.
"But we won't take a step back from protecting Australia's interests and from protecting Australia's national security."
"If the implementation of foreign laws is required to do that ... then we will most certainly pursue those."
Asked about reports Australian ministers have been refused Chinese visas, Senator Payne said she was unaware of herself or any of her officials having trouble.
China on Thursday dismissed reports it wants to build a military base in Vanuatu as "sheer fiction" from Australians stirring up trouble.
Senator Payne backed Mr Turnbull's view Australia would see the establishment of any foreign military bases in the region with great concern.
"We take the security and stability of our region very, very seriously," she said.
"We would not welcome an engagement of that sort."