After a meeting on the sidelines of a G20 summit, Chinese president Xi Jinping said he "hopes the Australian side continues to dedicate itself to providing foreign investors a fair, transparent and predictable policy environment".
"This also accords with Australia's own interests," China's foreign ministry quoted Xi as telling Australian prime minister Malcolm Turnbull.
China, Australia's biggest trading partner, hit out at Canberra after it prevented two Chinese firms from paying more than more than A$10bn (£5.94bn) for a controlling stake in its largest energy network Ausgrid amid "national security" concerns.
It came after UK prime minister Theresa May unexpectedly delayed her government's decision on the Hinkley Point C nuclear power plant, reportedly due to security concerns stemming from Chinese involvement.
Turnbull defended Australia's openness to international investors following China's comments, and said it has a sovereign right to reject some investment proposals.
"China has more freedom to invest in Australia, indeed all foreigners have more freedom to invest in Australia, than in almost any other country. We have a very open foreign investment policy," Turnbull said.
"So we mostly say yes, we almost invariably say yes, but from time to time we say no and we make no bones about that and China respects that."