China has accused Australia of "gross interference" in its internal affairs after Canberra suspended its extradition treaty with Hong Kong over concerns about Beijing's rights crackdown.
Scott Morrison, Australia's prime minister, said on Thursday his country would extend visas for people from Hong Kong, on the grounds that the new national security law marked a fundamental change in circumstances for the city.
China denounced what it labelled as "groundless accusations and measures" from the Australian government and urged Mr Morrison to stop interfering, adding that it reserved the right to take retaliatory actions.
A spokesperson for the Chinese embassy in Australia said: "We urge the Australian side to immediately stop meddling in Hong Kong affairs and China's internal affairs under any pretext or in any way. Otherwise it will lead to nothing but lifting a rock only to hit its own feet."
Under legislation introduced last week, Hong Kong suspects can be sent to trial in mainland China and can face up to life in prison for crimes including secession and subversion. Pro-democracy books have already been pulled from library shelves.
In addition, there are concerns about its effect on the autonomy of Hong Kong's justice system, as Beijing now has power to interpret the law and bypass local legislation. Some trials will also take place behind closed doors.
In response to the law, Mr Morrison said his government would welcome people from Hong Kong and encourage businesses to move to Australia from the Asian financial hub.
"There will be citizens of Hong Kong who may be looking to move elsewhere, to start a new life somewhere else, to take their skills, their businesses," Mr Morrison said.
The Australian prime minister added that Hong Kong citizens who were on temporary visas in Australia could stay for an extra five years and apply for permanent residency after that time, although existing caps would still be in force.
There are currently 10,000 Hong Kong citizens living in Australia on student visas or temporary working visas, according to the government.
Although future student visas will now be given for a five-year period, Mr Morrison said they were "not expecting large numbers of applicants any time soon".
This is not the first time that Australia has said it would help Chinese students. It offered 42,000 of them asylum following the Chinese government's crackdown on pro-democracy protests in 1989.
Along with the new measures, Australia changed its travel advice for Hong Kong, where 100,000 Australians live. The country warned its citizens that they "may be at increased risk of detention on vaguely defined national security grounds".
Other countries have also expressed unease at China's new national security law and the erosion of freedom in Hong Kong. Last week, Canada said it was suspending its extradition treaty with Hong Kong, while New Zealand announced it would review its own arrangements.
On Monday, China's ambassador to the UK, Liu Xiaoming, also rebuked the UK for "gross interference" over Hong Kong. The UK has accused China of breaching the Sino-British Declaration by implementing the new national security law. It was under this 1984 treaty that the UK handed Hong Kong over to Beijing in 1997.
The British government responded to the law by offering a path to citizenship to about 3 million Hong Kong residents.
Additional reporting by Reuters