Australian Foreign Minister Bob Carr hit out at critics of Chinese investment in the country, urging resistance to "nationalistic sloganeering" on the issue.
Rural politicians have warned against selling valuable farm and mineral land to foreigners, and the debate escalated after Canberra gave the go-ahead for the sale of the nation's biggest cotton farm to a Chinese-led consortium.
"The idea that foreign ownership of Australian mines or farms will somehow limit our control over production or undermine our food security is simply not correct," Carr told a conference in Sydney on Friday.
China is Australia's top trading partner, and its enterprises have expressed interest in buying mining and farming land as it seeks to secure supply.
But Chinese investment is a sensitive issue in Australia, with telecom firm Huawei banned for security reasons from bidding on the nation's broadband rollout earlier this year.
Carr said direct foreign investment from the Asian giant was only about 2.6 percent of all inward investment in 2011, well behind that from the United States, Britain, Japan and the Netherlands.
The European Union accounted for 34 percent of Australia's foreign investment, he added.
The foreign minister said Australia had nothing to fear from Chinese investment, particularly given growing transparency in Beijing.
"We should resist the temptation of falling back on narrow, nationalistic sloganeering when it comes to Chinese investment in Australia," Carr said.
"There's a retiring leader of China who's saying in effect we've got to have a different political system," he said in reference to outgoing Chinese Premier Wen Jiabao.
"Chinese leaders more than Wen Jiabao talk about democracy, talk about political reform.
"We've got to consider that there might be for us the challenging consequences of a more transparent Chinese politics, for example, the force of Chinese nationalism."
Canberra has argued that foreign investment is welcome and necessary.
In allowing the proposed sale of the Cubbie cotton station to a consortium led by Chinese textile company Shandong RuYi last month, Treasurer Wayne Swan said the investment was consistent with Australia's national interest.
But Queensland Nationals Senator Barnaby Joyce, who has lobbied against the sale, said it would be "a loss of another section of our prime agricultural land to an overseas interest".