Foreign Minister Julie Bishop has gone into damage control over a diplomatic row concerning China's aid to Pacific Island nations.
International Development Minister Concetta Fierravanti-Wells criticised China's assistance to tiny Pacific island nations for building "white elephant" projects and "roads to nowhere".
She also expressed concerns about the sustainability of China's loan arrangements with the island nations.
Beijing has reacted angrily to the remarks, lodging an official protest with Australia's embassy in Beijing.
Ms Bishop says the Australian government welcomes investment in developing nations in the Pacific that supports sustainable economic growth, and which does not impose onerous debt burdens on regional governments.
"Australia works with a wide range of development partners, including China, in pursuit of the goal of eliminating poverty in our region and globally," she said on Friday.
China media commentary from the Xinuhua newsagency warned Australia should "refrain from behaving like an arrogant overlord".
Labor's foreign affairs spokeswoman Penny Wong has labelled as "clumsy" the government's approach to bilateral relations with China.
The Lowy Insitute estimates China has poured $2.3 billion in aid to the South Pacific since 2006.
The Institute's Pacific Islands program director Jonathan Pryke said the senator had made a legitimate point, but the value of projects had to be assessed on a case-by-case basis.
Australia's own track record on aid support for road projects on Pacific Islands is not perfect.
In 2012, Australian money was used to upgrade a dirt track on Tanna Island in Vanuatu, from the airport to a nearby resort, aimed at boosting tourism.
It used local materials such as coral and stones.
The AusAID Vanuatu spokesman Simon Cramp told Radio Australia at the time it was much cheaper to not seal the road with tar.
Tar sealing in Vanuatu was expensive at $200,000 per kilometre because of the need to import materials and high shipping costs.
The Australian-funded project trained scores of locals to do the work. However, within 12 months the gravel had washed away, a local businessman told AAP.
The Vanuatu government later asked the Chinese to help fix the road properly.
Hundreds of Chinese workers, along with a small number of locals, have been sealing roads on the island for about three years now.
The island was hit by category five cyclone Pam in 2015 and is still recovering from the disaster.