An investigation into the death of Nick Zhao has uncovered an alleged Chinese plot to infiltrate the Australian government.

Scott Morrison says China’s “game-changing” position will “reset the world order”, saying it’s something we all need to get used to.

Speaking to Sky News Australia from Kirribilli House, the Prime Minister said China’s increased influence needed to be understood in terms of its rise.

“China in our lifetime has gone from a developing country, one of not great economic size or scale and not a large military, to the second biggest economy in the world with one of the largest militaries,” he said.

“So it’s obviously been the game-changing country of our era and our generation. That’s obviously going to reset the world order.

“We just need to understand that in its context. They’re a much bigger country than they used to be with much more influence, and that’s just something the system has to absorb and adapt to.”

Asked if the average Australian should be worried about China, he said “worry is not the word”.

“One of the things I’ve always sought to do with China is make our relationship direct with them … and the other thing I say openly is we’re not looking to adopt your system, and you’re not going to adopt ours. There’s a few things we’re not going to agree on, but that’s fine, and there’s so much else going on.”

The interview comes a couple of weeks after former prime minister Kevin Rudd lashed the Coalition’s relationship with China as self-serving, warning of a return of the “yellow peril”.

“I will be the first to the barricades if the most recent national security legislation becomes a political vehicle for Hansonism and a return to the days of the yellow peril,” he said.

“This approach … should be given effect as a legal and administrative process under Australian law, not as a populist witch-hunt.”

He urged the Government to develop and regularly update a clear and consistent China strategy.

“It would be negligent for Australia not to have our own,” he said.

“It should be crystal clear about our national objectives in relation to China, just as it should be clear in its understanding of what China’s objectives are in relation to Australia.”