The political debate over foreign interference has split China scholars, with two rival groups laying out radically different positions on whether the politically charged argument has stoked racism in Australia.

Last week a number of prominent China academics in Australia urged the Federal Government to withdraw its proposed anti-espionage laws, calling them a threat to academic freedom.

They also warned the broader debate over foreign interference was alarmist, and risked stoking xenophobia against Chinese Australians.

But now a second group of China experts have written their own open letter, accusing the Chinese Communist Party (CCP) of "unacceptable interference" in Australia, and warning accusations of racism could be used to stifle vital discussions about how to counter its activities.

"We firmly believe the current debate is not characterised by racism and that it is crucial for Australia to continue this debate," the letter says.

"In recent years the CCP's efforts at influence and interference in Australia have become increasingly bold, including an overt agenda to influence Chinese communities in Australia."

The academics accuse the Chinese Government of trying to "restrict personal freedoms, impede democratic processes and affect national security, with the potential to harm Australia's interests".

The letter has been signed by several experts, including James Leibold from La Trobe University, Feng Chongyi from the University of Technology, Kevin Carrico from Macquarie University and the Head of the National Security College, Rory Medcalf.

The academics say while racism exists on the fringes of the argument about foreign interference, the Chinese Government would be quick to exploit allegations of racial hatred.

"We are mindful also that racism is precisely the accusation that is encouraged and levelled by the CCP itself as it tries to silence the current discussion," the letter says.

"Through these accusations and its efforts to infiltrate Chinese communities, the CCP seeks to position itself as the protector of overseas Chinese and drive a wedge between Chinese communities and the rest of Australia."

In recent months, the Chinese embassy and consulates in Australia have issued two safety warnings for Chinese nationals, including one that cited instances of Chinese being subjected to 'humiliations'.

China's ambassador to Australia last year strongly rejected accusations Beijing was seeking to manipulate or interfere in Australia's democracy, and the country's state-controlled media late last year claimed politicians and journalists in Australia were whipping up 'anti-China hysteria'.

China has academia, Government on back foot

The missive exposes some of the fault lines in academia, which — like the Government — is grappling with the full implications of China's resurgence as a global power.

The first group of China scholars included several heavyweights. But some of the scholars who signed this letter were angered by their suggestion they were speaking for all China specialists.

The second group of academics do not lay out a united position on the foreign interference legislation being put forward by the Government, and the letter makes it clear some of the signatories believe the proposed laws should be changed substantially.

But it also recognises concerns the current laws are not strong enough to counter the threat of foreign interference.

Their main argument is that the full-throated debate on foreign interference should not be smothered.

"It is vital that the debate is driven by fact-based research and reporting rather than sensationalism or racism," the letter reads.

"It is also vital that this debate is not stifled by self-censorship."

The year-long debate about Chinese Communist Party interference took off with the airing of allegations in a joint ABC-Fairfax report about Chinese political donors and Beijing's substantial influence on Australia's Chinese language media.

The subsequent revisions to anti-espionage laws and the heated rhetoric about former Labor senator Sam Dastyari's relationship with a Chinese political donor strained relations with Beijing even further.