Beijing criticised Canberra Wednesday for "obstructing" the operations of Chinese firms in Australia after telecoms giant Huawei was banned from bidding for a big broadband project on security grounds.

The Chinese multinational, founded by a former People's Liberation Army engineer, has in the past also run afoul of US regulators and lawmakers on concerns it is closely connected to the Chinese military and Beijing.

"We hope competent authorities of Australia will provide a level and indiscriminate market environment for Chinese companies instead of wearing coloured glasses and obstructing Chinese companies' normal operations in Australia in the name of security," said foreign ministry spokesman Hong Lei.

"In recent years, China-Australia investment cooperation has not only provided opportunities to Chinese companies going global but also injected strong impetus into economic and social development, and people's well-being in Australia."

China is an important export market for Australia, which escaped the wrath of the recent global economic slump thanks largely to the Asian giant's voracious appetite for commodities such as iron ore and coal.

Huawei on Tuesday hit back at Australia's decision to block it from bidding for contracts on a huge, Aus$36 billion (US$38 billion) broadband plan due to fears of Chinese cyber attacks.

"Huawei is not a security risk to Australia," the firm's Australian chairman John Lord, formerly a long-serving rear admiral in the navy, was quoted as saying in the Australian Financial Review.

Lord said he had done "extensive due diligence" before taking his role including holding talks with Huawei founder Ren Zhengfei.

The Australian report said the decision to block Huawei was based on "strong advice" from intelligence operatives.

The computers of Australia's prime minister, foreign and defence ministers were all suspected of being hacked in March last year, with the attacks thought to have originated in China.

Beijing dismissed the allegations as "groundless and made out of ulterior purposes".