Scott Morrison has asserted China has made no secret of its ambitions in the Pacific, after reports emerged it was looking to build wharves and shipyards in the Solomon Islands.
A leaked copy of a memorandum of understanding between China and the Solomon Islands has revealed a draft agreement that would set up "deep-sea fishing bases" in the region.
It comes after the two countries signed a security pact earlier this year, which has raised alarm bells among western nations.
Labor used the leaked report to hit out at the government's handling of relations in the Pacific.
Speaking on the NSW south coast while campaigning in the marginal electorate of Gilmore, the prime minister said China's ambitions in the region were well known.
"We are very aware of what's happening in our region and of the pressures ... the Chinese government is seeking to put on countries right across our region," he told reporters on Monday.
"I am very concerned, as many other Pacific leaders are, about the interference and intrusion of the Chinese government into these types of arrangements and what that can mean for the peace, stability and security of the southwest Pacific."
Mr Morrison had previously stated that China building a military base in the Solomon islands would be a "red line".
He sought to emphasise Australia was still the preferred security partner of the Pacific nation.
"The first call when these things happen in our region, from any of our Pacific family, is to Australia (and) that remains the case," he said.
"The Australian Federal Police remain on the ground in Honiara now."
Labor's foreign affairs spokeswoman Penny Wong said while she could not verify reports of the leaked memorandum, it represented a concerning development in the region.
"If it's true, it demonstrates the seriousness of what has occurred on Mr Morrison's watch," she told reporters in Adelaide.
"It also demonstrates that the sort of tough words he's talking about, or trying to use, about red lines don't appear ... to be the way forward or appear to have much effect."
