Australia's Pacific minister Pat Conroy said new economic opportunities for Pacific Island nations should not be "accompanied by coercion and interference".
"We want to see a region where states can exercise sovereignty, free from coercion, and in accordance with international law," he said in a speech to a public policy think tank in Australia.
"We want a region that is peaceful and stable," he said ahead of a Pacific Island summit in Tonga later this month.
"China should be more transparent in the aid it is giving, and should treat infrastructure projects as opportunities for the Pacific to grow local employment, skills and procurement."
In the South Pacific, Canberra and Washington have been jolted into strengthening their ties with island nations since Beijing signed a secretive security deal with Solomon Islands in 2022.
Beijing has in more recent months embarked on its own flurry of influence-building endeavours, including injecting $20 million into Solomon Islands's budget.
The leaders of both Solomon Islands and Vanuatu were hosted in Beijing earlier this month for meetings with Chinese President Xi Jinping.
The United States last year re-opened its long defunct embassy in Solomon Islands, followed by the establishment of an embassy in the Kingdom of Tonga.
Several important maritime routes run through the vast but sparsely populated South Pacific, a potentially crucial gateway should flashpoints in the Taiwan Strait and South China Sea one day spiral into conflict.
The Philippines launched on Wednesday two days of joint sea and air exercises with the United States, Canada and Australia in the South China Sea.
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