One of China's top diplomats has called for an end to "confrontation and abusive language" in increasingly hostile exchanges between Australia and China, saying the relationship can be salvaged through better communication by both countries.

Madame Fu Ying, China's former ambassador to Australia and an influential figure in Beijing, also said China had a huge demand for Australia's resources, that Australian wine remained popular with Chinese consumers and it was in both countries' interests to work together. She rejected suggestions the relationship was "frozen".