China would become even more prosperous if it embraced democracy and greater legal freedoms, Opposition Leader Tony Abbott has told business leaders in Beijing.

In the main speech of his three-day visit to China, Mr Abbott said that as prime minister he would hope for China to embark on political reforms to match its economic liberalisation.

"In the long term, China should prosper even more if its people enjoyed freedom under the law and the right to choose a government, despite the difficulty of managing this transition in a country with a tumultuous history," he told a sold-out function hosted by AustCham.

Mr Abbott - who rarely speaks publicly on foreign policy issues - said Australia and China had very different attitudes to human rights, press freedom and the courts.

He said a coalition government would "be a strong voice for human rights" but would push the case for improvements respectfully.

"Whatever disagreements Australia has with China, it's important to acknowledge the vast improvement in living standards that Chinese people have enjoyed since the 1970s," he said.

Mr Abbott said conservative leaders from Robert Menzies to John Howard had had "good Asia credentials" and he would seek to maintain that consistency.

Mr Abbott pledged to visit China in the early days of his prime ministership, as part of his second overseas trip. He has previously pledged to make Jakarta his first overseas destination.

"It will take time and much further evolution for our friendship with China to approach the warmth that we take for granted with America. But it is worth the effort and it must be made," he said.

He rejected suggestions Australia would one day need to choose between its alliance with the US and commercial relationship with China.

"That's a choice we should never have to make. If we ever needed to, I suspect that the world would be in a dark place."

He pledged to renew Australia's free trade talks with China, which have dragged on for seven fruitless years.
An incoming coalition government would welcome Chinese investment on the same basis it would welcome investment from other countries, he said.

But he also warned Chinese investment was complicated by the prevalence of state-owned enterprises.
"It would rarely be in Australia's national interest to allow a foreign government or its agencies to control an Australian business," he said.

"That's because we don't support the nationalisation of business by the Australian government, let alone by a foreign one."

A coalition government would do all it could to ensure territorial disputes in the South China Sea were managed peacefully, he said.

It would also continue Australia's economic relationship with Taiwan within the bounds of the One China policy.