The normally cautious Department of Foreign and Trade boss also said China had kicked a "massive own goal" when it last year issued a list of 14 demands to the Australian government to improve relations.
The list of grievances the Chinese embassy compiled against Australia included the government's criticisms of Beijing's activities in the South China Sea and human rights abuses.
The DFAT secretary said she believed the move backfired terribly, something highlighted by the way world leaders reacted at this month's G7 meeting in Cornwall.
Her speech came as a new Lowy Institute poll showed more than 60 percent of Australians saw Beijing as an increasing security threat, responding negatively to Chinese investment in Australia and Chinese environmental policies, governance, and military activity.
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