China has warned Australia its people could suffer from further trade sanctions after confirming strained relations led to punitive tariffs.
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Severely damaged diplomatic ties sparked action from Beijing against Australian barley, beef, coal, copper, lobster, timber and wine.
Chinese foreign ministry spokesman Zhao Lijian was asked about Australian agricultural products losing market share in China at a news conference in Beijing.
"We will not allow any country to reap benefits from doing business with China while groundlessly accusing and smearing China and undermining China's core interests based on ideology," he told reporters.
"When a certain country acts as a cat's paw for others, it is the people that pay for misguided government policies."
Mr Zhao said falling market share for Australian farm produce showed how Canberra's approach served Australia.
Treasurer Josh Frydenberg said Scott Morrison was dealing with a very different China under President Xi Jinping than previous administrations.
He argued successive coalition governments stood up to Beijing on foreign interference and investment in the face of increasing assertiveness.
"We will not put economic interests first, we will put the broader national interest first," Mr Frydenberg told reporters in Canberra.
"That means standing with a very clear and consistent sense of where our national interest is and that is what we have done under prime minister Morrison."
He said China remained an important economic partner for Australia despite increased global competition.
"They have made no secret of the fact our exports are not all making their way to China - barley, wine, coal," the treasurer said.
Mr Frydenberg said China needed Australia iron ore, which is at near-record prices, with that commodity providing significant revenue to state and federal governments.
US President Joe Biden's Indo-Pacific coordinator Kurt Campbell criticised China's approach to Australia, warning of long-term tensions between the two nations.
"I'm not sure they have the strategic thinking to go back to a different kind of diplomacy towards Australia right now," he told the Asia Society think tank.
"I see a harshness in their approach that appears unyielding."
Australia's decision last year to call for an inquiry into the origins of coronavirus angered the Chinese government, which has a list of other grievances.
Australian Associated Press
