A visiting United States admiral has warned Beijing is willing to hurt Australian companies if the Federal Government defies the Chinese Communist Party.

Key points: Admiral Davidson linked recent trade blockages at Chinese ports of Australian exports to Australia's recent crackdown on foreign interference

Admiral Davidson linked recent trade blockages at Chinese ports of Australian exports to Australia's recent crackdown on foreign interference He said "Beijing's approach is pernicious"

He said "Beijing's approach is pernicious" The ABC has confirmed Admiral Davidson discussed Freedom of Navigation Operations in the South China Sea with Mr Morrison

The leader of the US military's Indo-Pacific Command, Admiral Philip Davidson, said Australia was right to be concerned about the possibility of a Chinese military base in the Pacific region.

Addressing the Lowy Institute, Admiral Davidson used Australia as an example of China's willingness to take retribution against economic partners that criticise Beijing.

"Beijing has shown a willingness to intervene in free markets and to hurt Australian companies simply because the Australian Government has exercised its sovereign right to protect its national security," Admiral Davidson said.

He linked recent trade blockages at Chinese ports of Australian exports such as coal to Australia's recent crackdown on foreign interference and a decision to ban Huawei from the 5G network.

"It speaks extraordinarily ill of China and serves as a warning to all nations of the kind of economic retribution they take when they dislike another nation's diplomatic or security response," he said.

Admiral Davidson also described China's signature international infrastructure development program, the "Belt and Road Initiative" as a "stalking horse to advance Chinese security concerns".

"Beijing's approach is pernicious. The party uses coercion, influence operations and military and diplomatic threats to bully other states to accommodate the Communist Party of China's interests," Admiral Davidson told his Sydney audience.

"Australia has [the] right to be very concerned about the Chinese potentially building a base in the island chain. Part of the Indo-Pacific strategy the US has put forward — and I believe Australia has made quite clear is in its national interest — is to prevent such bases from happening."

China has consistently rejected suggestions it has linked aid money to politics, while Australian officials have warned Pacific nations about the negative consequences of joining the "Belt and Road Initiative".

Admiral discusses South China Sea operations

During his visit to Australia, the Indo-Pacific Commander held meetings with military and political officials including Prime Minister Scott Morrison and Defence Minister Linda Reynolds.

The ABC has confirmed Admiral Davidson discussed Freedom of Navigation Operations (FONOPS) in the South China Sea when he held talks with Mr Morrison in Canberra on Wednesday.

A spokesman for the Prime Minister declined to say whether Australia was asked to follow the United States military in conducting its own FONOP to challenge Beijing's territorial claims in the crucial trading waterways.