But the Morrison government is not resiling.

Australia has offered a path to permanent residency for thousands after Hong Kong passed new national security laws cracking down on dissent.

China labelled the move "gross interference" in the latest escalation of a bitter diplomatic row with Canberra.

Foreign ministry spokesman Zhao Lijian strongly condemned the moves.

"China urges Australia to immediately change course, stop intervening in Hong Kong affairs and China's domestic affairs, and prevent further harm to China-Australia relations," he said in Beijing.

An editorial in Communist Party mouthpiece the China Daily warned Australia was pushing the bilateral ties to breaking point.

"Australia is not irreplaceable, as it will find out to its cost if it persists with its adversarial stance," the editorial said.

Prime Minister Scott Morrison wasn't alarmed.

"Australia will just continue to stand up for our interests and we will continue to pursue our policies consistent with those interests," he said.

His deputy, Michael McCormack, said Australia would use diplomatic channels to work through issues with China, conceding relations were "a bit fractious" after being pressed.

"There is always going to be hiccups. At the moment, times are a little bit difficult," he said.

The Nationals leader pointed to the almost $150 billion worth of Australian goods exported to China last year.

"We've got a great relationship with China and that will continue."

Beijing imposed new legislation on Hong Kong last week that criminalises subversion, secession and collusion with foreign forces.

Pro-democracy protesters have since been charged for holding flags, posters and pamphlets.

Mr Morrison said this undermined Hong Kong's independence and the "one country, two systems" pact with Beijing.

Australia has suspended its extradition treaty with Hong Kong and will establish an incentive program for businesses to relocate to Australia.

Mr Morrison discussed the move with state leaders during national cabinet on Friday.

The government was keen to attract "footloose businesses and industries" from Hong Kong.

The Labor opposition is seeking further detail on how the visa extensions will apply to family members who might still be in Hong Kong and whether any people already in Australia could face deportation.

Australian Associated Press