The home affairs minister, Peter Dutton, has launched a wide-ranging attack on the Chinese Communist party, accusing it of engineering a series of cyber-attacks on Australian targets, stealing intellectual property and muzzling free speech.

The comments prompted a sharp rebuke from the Chinese government overnight, with China’s foreign ministry spokesman, Geng Shuang, telling reporters during a press conference that he hoped “Australia will reject the cold war mentality and bias, and work to advance bilateral relations and mutual trust”.

Meanwhile, the Chinese embassy issued a statement saying: “We categorically reject Mr Dutton’s irrational accusations against China, which are shocking and baseless.”

While drawing a clear distinction between “the amazing Chinese diaspora community in Australia” and the Chinese government, Dutton said Australia needed to have a “frank conversation” over China’s global influence, its infrastructure Belt and Road Initiative, expansionism in the South China Sea and growing military and aid presence in the Indo-Pacific.

Dutton’s comments are, by some margin, the strongest criticism of the Chinese government by a serving Australian minister.

The Chinese embassy described Dutton’s comments as “anti-China rhetoric”.

“We strongly condemn his malicious slur on the Communist Party of China, which constitutes an outright provocation to the Chinese people,” the embassy statement said. “Such ridiculous rhetoric severely harms the mutual trust between China and Australia and betrays the common interests of the two peoples.”

Dutton said China’s actions on the global stage often conflicted with Australian values and were incompatible with democratic forms of government.

“We have a very important trading relationship with China, incredibly important, but we’re not going to allow university students to be unduly influenced,” Dutton said. “We’re not going to allow theft of intellectual property and we’re not going to allow our government bodies or non-government bodies to be hacked into.

“Our issue, as I’ve said before, is not with the Chinese people, not with the amazing Chinese diaspora community that 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.

“In a democracy like ours, we encourage freedom of speech, freedom of expression, thought, and if that’s being impinged, if people are operating outside of the law, then whether they’re from China or from any other country, we have a right to call that out.”

On Saturday, the Australian prime minister, Scott Morrison, downplayed Dutton’s comments.

“I think they just simply reflect the fact that we’re two different countries,” Morrison told reporters in Suva on Saturday during his visit to Fiji. “I think our relationship with China will always remain positive, because it’s focused on the things that we agree on and that benefit each country, not on the areas that I think there are clear differences.”

But Labor backbencher Peter Khalil accused the Morrison government of undermining the relationship with China.

“They’ve botched this relationship,” Khalil told the ABC. “There’s something called diplomacy, diplomatic language. I wish there were more adults in the Coalition party room and government.

“They’re saying these things for domestic political point-scoring, not for Australia’s national interests.”

Relations between the Australian and Chinese governments are strained over a number of long-running issues.

Canberra has protested over Chinese government interference in Australia, particularly in politics and education, while Beijing has been volubly displeased at Australia’s new foreign interference laws, and the banning of Chinese telco Huawei from building any of Australia’s 5G network, citing national security concerns.

Beijing has criticised Australia’s position that China should no longer be recognised as a “developing” country by the World Trade Organisation but rather as a “newly developed” one.

Australia has also spoken out strongly over the continued detention of Australian writer and democracy activist Yang Hengjun, who has been held in Beijing for seven months and potentially faces the death penalty over alleged espionage. Australia strongly suspects his arrest is politically motivated and that there is no evidence to support the charges.

While it has not been confirmed, Australia’s intelligence agencies also believe Chinese hackers were behind attacks on the Australian National University, as well as on political parties, and the Parliament House computer system.

The government has established a taskforce to safeguard Australian universities from foreign interference, after concerns were raised about Chinese academics collaborating on security, surveillance and defence technology-related projects in Australia.

Dutton’s comments on China on Friday came as the Australian prime minister, Scott Morrison, visited Suva for talks with his Fijian counterpart, Frank Bainimarama, the pair greeting each other with a hug.

The two prime ministers announced Pacific Islanders living in Australia will be able to bring double the amount of kava – from 2kg to 4kg – into the country under new relaxed regulations. A trial program for the commercial importation of kava – the roots of the kava plant are used to make a bitter, sedative drink that holds strong cultural significance in the Pacific – will begin next year.

Morrison, accompanied by the foreign affairs minister, Marise Payne, and the minister for international development and the Pacific, Alex Hawke, will visit the Black Rock military base, a key regional training hub for police and peacekeepers at the weekend.

Australia is funding the development of Black Rock, having effectively outbid China for the right to contribute to the project.

Morrison drove over the Fiji-China friendship bridge on the way to his meeting with Bainimarama, held nearby to a 30-storey tower being built by Beijing, soon to be the tallest building in the Pacific islands.

During the Pacific Islands Forum in Tuvalu in August, Bainimarama said Australia’s heavy-handed attitude during discussions on climate change was driving Pacific countries towards closer ties with China.

Describing Morrison as “very insulting, very condescending”, Bainimarama said: “China never insults the Pacific.”