"Australia very much regrets that China has decided to effect that response," Australian Foreign Minister Stephen Smith told parliament on Tuesday.

"We have a long-standing, productive economic relationship with China. From time to time in any bilateral relationship there will be difficulties. These difficulties need to be managed carefully and successfully, as Australia is currently managing difficulties that we currently have with China."

Kadeer, who was jailed in China for several years before being released into exile in the US, travelled to Melbourne earlier this month to give a speech at the city's film festival showing a documentary about her life.

Beijing had urged Canberra not to
grant Kadeer a visa [Reuters]
Beijing accuses Kadeer of inciting riots between Uighurs and members of the dominant Han Chinese group in Xinjiang in July that killed at least 197 people and injured more than 1,700. She has denied the accusations.

Shortly before the Melbourne festival, Chinese officials had urged Australia not to allow the visit to go ahead and several Chinese film directors pulled their films from the event in protest.

China-Australia relations have also been strained by the arrest of Australian Stern Hu and three other Rio Tinto employees, who have been charged with infringing trade secrets and bribery in the multibillion-dollar iron ore trade.

The arrests continue to sour relations between Beijing and Canberra, as long-running differences remain over iron ore pricing and Chinese state-controlled investment in Australia's resource industry.