Deputy Prime Minister Barnaby Joyce has suggested China may want a naval base in Solomon Islands to "intimidate" Australia or "restrict our capacity of movement".
Mr Joyce has also denied the government was caught by surprise when a draft security agreement between the two countries leaked last week, saying Australian intelligence agencies were "all over" the development.
The Opposition Leader in Solomon Islands, Matthew Wale, has criticised Australia's response to growing security cooperation between China and the incumbent government of Prime Minister Manasseh Sogavare, and said he first warned the federal government about nascent security negotiations last year.
But Mr Joyce said it was wrong to suggest Australia had been caught unaware, or that its response had been flat-footed.
"I think they'd be highly naive to think the Australian government is not completely over this issue. The Prime Minister, the national security community, they are not fools," he said.
The draft agreement between Solomon Islands and China would provide a broadly worded framework which could be used to authorise a future for a Chinese military presence in the Pacific Island nation just north of Australia.
However, it's not clear whether the version which was leaked online is the most recent one, or whether it represents an early "ambit claim" by China.
Mr Joyce said the federal government had ploughed enormous effort and resources into building its ties with Pacific Island nations.
"We are engaged because we are not blind to the tactics of other people who are going through the process of trying to restrict our capacity of movement and intimidate us," he said.
He also questioned why China would want a military base in Melanesia, and suggested it might well be aimed directly at Australia.
"I mean, they are not under threat from the Antarctic and New Zealand."
Mr Joyce said the episode demonstrated why Australia had to build up its military muscle and economic resilience in order to "become as strong as possible, as quickly as possible".
Australia has also begun to lobby other Pacific Island nations against the draft agreement.
Prime Minister Scott Morrison spoke to his Papua New Guinea and Fijian counterparts James Marape and Frank Bainimarama on Monday, while the Minister for International Development Zed Seselja last week predicted "significant pushback" in the region.
This morning, Mr Morrison said the agreement was "not a surprise" to Australia, and a "reminder of constant pressures and threats that present in our region to our own national security".
He also defended the government's Pacific Step Up, saying Australia had put huge resources into security cooperation, development and vaccine distribution across the region.
New Zealand Prime Minister Jacinda Ardern also weighed in this morning, saying the agreement being negotiated by Solomon Islands and China was "gravely concerning" to her country.
"We see such acts as the potential militarisation of the region," she told Radio NZ.
"We see very little reason in terms of Pacific security for such a need and such a presence."
