China-Australia relations reached a new low on Monday when a senior Chinese official posted a fake image of an Australian soldier on Twitter.

Scott Morrison slammed the "truly repugnant" propaganda, which comes amid heightened diplomatic and trade tensions between the two countries.

Relations have soured since Australia's calls for an independent investigation into the Chinese origins of the deadly COVID-19 virus back in May.

New Zealand was slow to join that push but eventually did so and called on Taiwan to be reinstated to the World Health Organisation.

That angered China and earned Ms Ardern's government a formal rebuke.

This month, New Zealand also joined with allies Australia, Canada, the US and the UK in calling for a restoration of democracy and the rule of law in Hong Kong.

For that provocation, China said it would "poke the eyes" of governments that interferes in China's sovereignty.

Still, New Zealand has avoided trade repercussions from Beijing of the manner that Australia is experiencing.

Ms Ardern said her country's position on Hong Kong was "completely understandable and reasonable" and the threat of sanction wouldn't stop her government speaking out.

"We've always maintained our independence and our foreign policy," she said.

"Yes of course we have very important trading relationships with a number of nations. We do not let that change the position that we take on issues that matter to us."

Asked why New Zealand wasn't getting similar treatment China, Ms Ardern suggested consistency and predictability was key.

"We signal we have these concerns, and in a very predictable way we will use different forums, whether it's ministerial statements, whether it's bilateral," she said.

"New Zealand is pretty predictable in these areas and that's the course of action that we take with any country where we have concerns."

Australian Associated Press