PM denies top bureaucrat provoking China

Prime Minister Tony Abbott has denied it was provocative of his top bureaucrat to say that China was not willing or able to be a global leader.

Prime Minister and Cabinet department secretary Michael Thawley said Australia still needed to depend on America because China gets in the way or out of the way when it comes to global problem solving.

"What we want to do is encourage China to assume a role commensurate with its strength," Mr Abbott told reporters in Williamtown in NSW, adding that the China-led Asia Infrastructure Investment Bank was a good illustration of what China could achieve in a rules based international order.

Labor foreign affairs spokeswoman Tanya Plibersek said Mr Thawley's comments were telling.

"To have this sort of comment expressed by the prime minister's most senior policy adviser perhaps gives us an insight into why the prime minister made those strange comments to (German Chancellor) Angela Merkel that Australia's relationship with China was governed by fear and greed," she told ABC TV on Wednesday.

It also helped explained the federal government's poor handling over whether Australia would join the infrastructure bank, she said.