The Landbridge group was granted a 99-year lease on the northern port of Darwin in 2015, a widely criticised decision that led to stricter scrutiny of major infrastructure sales.

Prime Minister Anthony Albanese last month said the port should be "in Australian hands" and vowed to buy back control of the "strategic asset".

But ambassador Xiao Qian urged Canberra to honour its contract with Landbridge, a sprawling energy and infrastructure firm increasingly setting its sights beyond China.

"Such an enterprise and project deserves encouragement, not punishment," he said, according to a transcript published on the Chinese embassy's website over the weekend.

"It is ethically questionable to lease the port when it was unprofitable and then seek to reclaim it once it becomes profitable."

Albanese had criticised Australia's former conservative government for "flogging off" the port to "a company with links to the Chinese government".

Darwin lies closest to Australia's Asian neighbours and has been used as a base for US Marines.

At the time of the agreement, then-US president Barack Obama reportedly complained that Washington had not been told of Australia's plan to do business with Landbridge.