Australia's ambassador to China was summoned for a meeting at Beijing's Ministry of Foreign Affairs, in another sign of heightened tensions over the Turnbull government's crackdown on foreign interference.
While Prime Minister Malcolm Turnbull has maintained that sweeping new laws are not directed at any one country, he has described reports of Chinese interference as "disturbing", triggering anger from the communist government and state-run media.
Ambassador Jan Adams' meeting - first reported by The Australian and confirmed by Fairfax Media - comes as Mr Turnbull rejects the Chinese criticism, saying he is standing up for Australian sovereignty.
In their attacks on Labor senator Sam Dastyari, Mr Turnbull and other senior Coalition figures have said his involvement with Chinese Communist Party-aligned interests in Australia was a "classic case" of foreign influence and accused him of being a "double agent".
The Prime Minister said Australia took seriously the reports of Chinese interference in the media, universities and politics.
"Modern China was founded by the statement that Chinese people have stood up. And today, and every day, the Australian people stand up and assert their sovereignty in our nation, with our parliament and with our laws," Mr Turnbull said last week.
A spokesman for China's Ministry of Foreign Affairs said Beijing said he was "astonished" by some of the language.
"This kind of statement caters to the irresponsible reports by the Australian media that are biased against China, absolutely clutching at straws, purely fabricated and poisoning the atmosphere of China Australian relations", spokesman Geng Shuang said.
China's state-run People's Daily, described media coverage of Chinese influence in Australia as "hysterical paranoia" with racist undertones, saying it was damaging Australia's multicultural reputation.
The furore over Senator Dastyari, who has announced his resignation from Parliament, and foreign interference is set to impact Saturday's byelection in Bennelong, a seat with a large Chinese-Australian population.
Around half of respondents to a Fairfax Media-ReachTEL poll said revelations about Senator Dastyari would affect their vote.