Australia's foreign minister raised China's internment of Uighur minorities in Xinjiang at a meeting with her Chinese counterpart on Thursday as Beijing comes under increasing worldwide scrutiny over its controversial security policy.
"This is our patch, this is our part of the world", Morrison said in his most detailed foreign policy speech since becoming prime minister in August.
Morrison said Australia would also expand its diplomatic presence in the Pacific, posting staff to Palau, the Marshall Islands, French Polynesia, Niue and the Cook Islands.
Declaring a "new chapter" in relations with the Pacific, Mr Morrison unveiled plans to establish a A$2 billion infrastructure bank to issue grants and long-term loans for telecommunications, energy, transport and water projects.
But Mr Morrison attempted to play down suggestions that the new measures in the Pacific were aimed at China.
"In our respective way, we can contribute to the development and prosperity in the Pacific island countries", Wang said.
Mr Wang said he believed Australia and China could cooperate in the South Pacific.
Australia and China have been vying for influence in sparsely populated Pacific island countries that control vast swathes of resource-rich oceans.
"China is firmly against terrorism, and will take strict precautions against the spread of terrorism domestically", Wang said.
Chinese State Councilor and Foreign Minister Wang Yi (R) and Australian Foreign Minister Marise Payne hold the fifth China-Australia Foreign and Strategic Dialogue in Beijing, capital of China, Nov. 8, 2018.
But China's growing ties, including substantial low-interest loans to some countries, have prompted concerns in Canberra that small nations such as Vanuatu or Tonga may fall into a debt trap and are unable to repay loans and may become politically indebted to Beijing.
In a speech last week, Opposition leader Bill Shorten promised to put Pacific "front and centre" in Australia's foreign policy if elected, and ensure that those islands looking for partners to help them build infrastructure "look to Australia first".
The government on Wednesday rejected CK Group's A$13 billion (RM39.1 billion) bid for gas pipeline operator APA Group on national security concerns, a decision that has the potential to further inflame diplomatic tensions.
Australia welcomes China's stepping up investment, the minister said, adding that the cooperation under the Belt and Road Initiative will contribute to the infrastructure construction in the region.
Prior to Payne's visit, China had unofficially suspended accepting visits by senior Australian ministers, and Chinese state media had carried numerous anti-Australian articles.