The Turnbull government insists China is not a military threat to Australia's national security, but there are no plans to sell defence exports to Beijing.
Prime Minister Malcolm Turnbull and Defence Industry Minister Christopher Pyne were both busy separately spruiking on Tuesday their ambitious plan to ramp up military exports and push Australia from 20th into the top 10 of global rankings for defence exports.
Mr Pyne inspected Electro Optic Systems' remote weapons systems, a Canberra-based company that has just been awarded a $410 million overseas contract.
He reiterated the intelligence alliance of "five eyes" countries - Canada, New Zealand, the United Kingdom and the United States - were the main priority markets along with Europe.
The government was also exploring opportunities in India, Japan, South Korea and Malaysia.
"We obviously don't see China as a military threat," Mr Pyne said.
"We would not at this stage be exploring military sales to China, that isn't a priority market."
He said China had its own sophisticated domestic defence industry and Beijing was unlikely to even look to Australia.
Mr Pyne defended the Australian subsidiaries of international defence companies potentially being able to access taxpayer dollars in loans for overseas contract negotiations.
"If they are part of a consortium, trying to win an overseas tender, then obviously we look at ... whether it fulfilled the requirement," he said.
Meanwhile, Mr Turnbull inspected defence electronics at Thomas Global Systems in Sydney, saying he wants to encourage more Australian family-owned businesses to compete globally.
"Let me tell you - Australians can win anything. Australians can do anything. They can compete with anybody," he told reporters.