Chinese trade with Australia could be under threat, but Prime Minister Malcolm Turnbull says any "ups and downs" in the bilateral relationship are coming from a high base.
The Chinese ambassador to Australia told The Australian that if growing distrust was allowed to fester it could damage the trade relationship.
Australia is bringing in laws trying to stop foreign donations to political parties, but Ambassador Cheng Jingye rejected any suggestions China was trying to interfere in Australian politics.
Speaking in London, where he is attending the CHOGM meeting, Mr Turnbull said the two countries shared a strong relationship that was getting better.
"We have a very strong economic relationship with China, in fact it's strengthening all the time," the prime minister told reporters on Wednesday local time.
"From time to time there are differences in the relationship, if there are ups and downs, it's from a very, very high base.
"Trade has never been higher in every respect."
But Mr Turnbull said he will not step back from the foreign donation laws.
"We are taking every step that we can, with our foreign interference legislation, to ensure that Australians, and Australians only, are the ones who influence Australian political processes," he said.
Labor foreign affairs spokeswoman Penny Wong said safeguarding Australian sovereignty came above partisan politics, but the government had been "clumsy" in its language towards China in recent months.
"Every Australian government of both political persuasions has had to manage differences with China," Senator Wong told Sky News.
"I think we are seeing that this government's management of those differences has been characterised by too much clumsiness in recent times."
Senator Wong said foreign donations ought to be banned and greater transparency measures imposed on lobbying efforts on behalf of foreign governments to safeguard Australia's sovereignty.
Australian Associated Press
