The Chinese embassy has warned Australia against involvement in its actions over Taiwan, saying "finger-pointing" against Beijing was unacceptable.

China launched ballistic missiles during live-fire exercises near Taiwan following US House Speaker Nancy Pelosi's controversial visit to the island earlier in the week.

Australia will remain clear and calm in its interactions with China but will not shy away from calling the nation out, cabinet minister Chris Bowen said.

"China's reaction to (Ms Pelosi's visit) is over the top ... obviously it is a time for clear and calm heads," the Climate Change Minister told the Nine Network on Sunday.

"We're going to act in Australia's national interests and in accordance with our values ... we will say what we believe should happen in the region and we will make statements even if other nations don't agree with those."

A joint statement from Australia, the United States and Japan on Friday condemned the Chinese government's actions and urged them to immediately cease military exercises.

The Chinese embassy in Australia responded with a statement on Saturday expressing concern and "discontent".

"The actions taken by Chinese government to safeguard state sovereignty and territorial integrity and curb the separatist activities are legitimate and justified," the statement said.

"Instead of expressing sympathy and support to the victim, the Australian side has condemned the victim along with the perpetrators."

Opposition defence spokesman Andrew Hastie described the strategic outlook in the region as "bleak".

A defence review announced by the government last week must ensure there are no cuts to the Australian Defence Force's capability, he said.

"(Australia needs) more fuel stocks ... we need more ammo stocks ... we need to continue to invest in our cyber resilience," Mr Hastie told ABC Insiders.

"We need relentless, political focus on delivering (nuclear) submarines for our country."

Yet Mr Hastie supported Foreign Minister Penny Wong's diplomatic engagement with China and Taiwan.

"Miscommunication, miscalculation, is at the highest risk and allowing a little bit of space for ... all parties involved to give each other the benefit of the doubt is really important," he said.

"Things are a little bit tense at the moment ... in the end we need to continue to engage with China and Taiwan."

With Reuters

Australian Associated Press