Recently China had been doing things like delaying seafood inspections until shipments spoil. Refusing iron ore and coal imports from Australia.
It’s clear that China is trying to pick off Australia from the Western alliance. Since Australia is uniquely at risk from Chinese economic actions (Highly dependent on China, but China won’t be hurt that much) it makes a great test case for China.
And all China is looking for from Australia is “neutrality”. Don’t align with the US on territorial disputes, don’t back Taiwan as an independent country, don’t condemn China for its treatment of Uighurs.
Australia is right that as long as the Western countries stick together they have the power to check China in the region. But if they get picked off one by one, China will win.