China has blasted Scott Morrison's offer of a pathway to permanent residency in Australia for more than 12,000 Hongkongers and suspension of an extradition treaty as deplorable, with the government privately bracing for a trade backlash as punishment.

Declaring Beijing's national security crackdown undermined the territory's political autonomy, Mr Morrison also revealed the government would try to lure Hong Kong based businesses and headhunt entrepreneurial Hongkongers to relocate to Australia.