Chinas influence is strong enough to cause the AU PM to say stupid things: https://www.techdirt.com/articles/20170714/10385237789/aussi...
Especially since any penetration of encryption within Australia would likely be turned against foreign agents (including the Chinese).
Also AFAIK we're still stuck in an unequal trade war with the PRC so they're not exactly flavour of the month around here.
I guess the West should improve their track record on "working best with dictators".
The PM is basically mirroring the position of the Five Eyes alliance of which Australia has been a member for longer than Communist China has existed.
The relationship is mutual and losing manufacturing contracts with large international companies would deeply affect the Chinese economy.
Admittedly, the Chinese government has very long range vision compared to other governments and can unilaterally enforce austerity on their working class population in ways democratic regimes cannot.
That doesn't mean that China can alienate its international business partners with impunity.