One of the Morrison Government's most senior figures has taken a direct swipe at Beijing, accusing the Chinese Communist Party of behaving in ways that are "inconsistent" with Australian values.

Key points: Mr Dutton said the Federal Government would call out state actors if it was in the national interest

Mr Dutton said the Federal Government would call out state actors if it was in the national interest He said he wanted universities to be free from foreign interference

He said he wanted universities to be free from foreign interference The Home Affairs Minster also criticised China's Belt and Road Initiative and defended a ban on using Huawei to help build Australia's 5G network

Home Affairs Minister Peter Dutton warned Australia would "call out" foreign interference in universities, as well as cyber hacks and theft of intellectual property (IP), insisting it was the right thing to do.

It represents some of the strongest language yet from a Federal Government minister on the threat posed by China.

"Our issue is not with the Chinese people, not with the amazing Chinese diaspora community we have here in Australia, my issue is with the Communist Party of China and their policies to the extent that they're inconsistent with our own values," Mr Dutton said.

Mr Dutton said many government officials, top bureaucrats and intelligence experts shared his concerns.

"We have a very important trading relationship with China but we won't allow university students to be unduly influenced," he said.

"We won't allow theft of intellectual property and we won't allow our government bodies or our non-government bodies to be hacked into."

He declared the Federal Government would call out state actors when it was in the national interest.

However, last month Prime Minister Scott Morrison declined to confirm if China was behind a cyber attack on Canberra's Parliament House ahead of the May election, after reports emerged intelligence officials had concluded that was the case.

The Federal Government has been more proactive in tackling foreign influence on university campuses, recently creating a taskforce to investigate it.

"We want university campuses to be free, we want them to be liberal in their thoughts, we want young minds to be able to compete against each other but we don't want interference in that space, we don't want theft of IP in our country," Mr Dutton said.

"I think the warnings should be heeded.

"In a democracy like ours, we encourage freedom of speech, freedom of expression, thought, et cetera.

"And if that is being impinged, if people are operating outside of the law, then whether they are from China or from any other country, we have a right to call that out."

Mr Morrison declined to confirm if China was behind a cyber attack on Canberra's Parliament House ahead of the May election. ( AAP: Lukas Coch )

Mutual trust with China 'betrayed'

China hit back at the criticism, describing Mr Dutton's comments as a "malicious slur".

"We categorically reject Mr Dutton's irrational accusations against China, which are shocking and baseless," the Chinese embassy said in a statement.

"We strongly condemn his malicious slur on the Communist Party of China, which constitutes an outright provocation to the Chinese people.

"Such ridiculous rhetoric severely harms the mutual trust between China and Australia and betrays the common interests of the two peoples."

Mr Dutton also defended the Federal Government's decision to ban Chinese telecommunications company Huawei from supplying equipment to Australia's 5G mobile network.

"The cyber world that we're on the cusp of is hardly imagined by many Australians," he said.

"5G, the internet of things, the connectivity, buildings of devices around the world that will be upon us within a matter of years is part of the reason the Government made a decision not to allow certain vendors into the 5G market.

Mr Dutton said many government officials and intelligence experts shared his concerns. ( ABC News: Matt Roberts )

And Mr Dutton criticised China's Belt and Road Initiative, which promises to be the biggest infrastructure project in history.

Roads, railways and sea ports are being built to facilitate trade and link China's economy to two thirds of the world's population, with about 7,000 projects to be completed in more than 70 Asian, African and European countries.

Critics have questioned the motives behind the initiative, which is something Mr Dutton says is worth discussing.

"The threat is very real," he said.

"We have got issues in the South China Sea, issues in Sri Lanka in the development of a port there.

"There is discussion in Pakistan and India on these matters at the moment, issues in Africa as well. The Belt and Road Initiative is well known, the Chinese have laid that out and I think the frank conversation is the right one to have."

Immigration Minister David Coleman and Treasurer Josh Frydenberg agreed that in many cases China's values were inconsistent with Australia's.

"Australia and China have very different political systems and that's abundantly clear," Mr Frydenberg said.