The prime minister used WeChat to respond to an offensive tweet by a senior Chinese government official.

But the Chinese platform blocked his post, saying it distorted historical events and would confuse the public.

Mr Morrison played a straight bat when asked about the intervention and Twitter's refusal to remove the original image.

"I'll leave that for them to explain their actions and I'll leave WeChat to make an explanation of their actions if they choose to make one," he told reporters on Thursday.

Mr Morrison said it was important for the Australian government to articulate its views.

"But what is most important, is despite the events of recent months and weeks and indeed years, Australia remains committed to constructive and open and regular dialogue at a leader and ministerial level to address the tensions are clearly there in the relationship," he said.

"It is in our interest to do that, it's in the Chinese government's to do that."

The ugly diplomatic spat centres on allegations of war crimes against Australian troops who served in Afghanistan.

Treasurer Josh Frydenberg is disappointed China deliberately stoked tensions with the inflammatory propaganda post.

"What the prime minister did in his WeChat message before it was disappointingly deleted was he made it very clear Australia is proud of its servicemen and women who wear the uniform," he said.

"We have established a transparent process to deal with those matters.

"Despite the challenges in the bilateral relationship, that in no way diminishes our respect and admiration for the Chinese Australian community, but also the people of China."

Mr Frydenberg, who also has to manage deteriorating trade ties, said the bilateral relationship between Australia and China was critical.

He rejected suggestions the prime minister overreached in demanding an apology for the incendiary tweet.

Shadow treasurer Jim Chalmers said the broken Chinese relationship was causing Australian exporters and industry groups immense anxiety.

"I think it is self-evident the relationship is not in good condition," he told ABC radio.

"It is an especially low ebb for the relationship between our countries."

National accounts figures suggest the Australian economy could be fully recovered from the coronavirus recession by the end of next year.

But that could depend on repairing abysmal relations with China, given how reliant Australian exporters are on the country's largest trading partner.

China has launched trade strikes against a range of agricultural imports and could decimate the Australian economy if it stops buying coal and iron ore.

Mr Frydenberg said it was a challenging time for the trade relationship, which is worth more than $200 billion a year.

He said Australia would continue to try and resolve tensions with China and through international tribunals, but would not give ground on its sovereignty or national security.

At the same time, the government is working with exporters to open up new markets in other countries.

Home Affairs Minister Peter Dutton, who is responsible for managing foreign interference and espionage threats, said Australia would not be bullied into submission or treated with disrespect.

"We stand up for what we believe in and we don't compromise on those principles," he said.

Australian Associated Press