China's visiting Premier has dismissed suggestions his nation is "militarising" the waters of the South China Sea, but has acknowledged defence equipment placed on disputed islands was to help maintain "freedom of navigation".

Premier Li Keqiang's comments came after formal bilateral talks with Prime Minister Malcolm Turnbull in Canberra, where the maritime dispute to Australia's north was one of the topics discussed.

"With respect to the so-called militarisation, China never has any intention to engage in militarisation in the South China Sea," Mr Li told reporters through an interpreter.

Beijing has drawn widespread international criticism for its rapid build-up of artificial islands in the disputed waterways.

In recent times satellite images have documented large-scale weapon systems being placed on islands, prompting security experts to warn China now has "effective control" over the South China Sea.

"China's facilities, Chinese islands and reefs, are primarily for civilian purposes and, even if there is a certain amount of defence equipment or facilities, it is for maintaining the freedom of navigation," Mr Li said.

Prime Minister Malcolm Turnbull restated Australia's long-held position that all parties should resolve their differences peacefully and in accordance with international law.

"We encourage all parties to refrain from taking any actions which would add to tensions, including actions of militarisation of disputed features," Mr Turnbull said.

The two leaders also signed a deal to further boost trade, including an agreement to boost chilled beef exports, building on the China-Australia free trade agreement that has been in force since December 2015.