China says one of its submarines has test-launched a ballistic missile with a dummy warhead into the Pacific Ocean.
Australia's Foreign Minister Penny Wong accused China of "destabilising" the region, while Beijing called it a "routine part of China's annual military program".
The test launch came hours after Australia signed a new defence pact with its Pacific island neighbour Fiji.
Australia has sought to strengthen its Pacific relationships after China signed a security pact with Solomon Islands in 2022, sparking fears Beijing could one day set up a permanent military base there.
Beijing had informed Canberra of its plans to conduct the missile test hours before, Defence Minister Richard Marles said at a press conference on Monday.
Marles added that Australia is "very concerned about any actions which undermine the stability, the peace, and security of the Pacific".
Governments across the Indo-Pacific region, including New Zealand, Japan and Papua New Guinea, were informed by Chinese officials of their military's intention to conduct sea-based drills on Monday.
New Zealand's Foreign Minister Winston Peters called the test an "unwelcome and concerning development", and one that his government will discuss with Pacific partners.
Japan said it had "strongly urged" China to reconsider the move after it was informed of the launch 90 minutes before it happened.
China said its missile test was part of "routine" military training and "not directed at any specific country or target".
"The related launch activity was conducted in a safe, regulated, and professional manner, and we hope that certain countries will refrain from overinterpreting them," China's Foreign Ministry spokeswoman Mao Ning said after the launch on Monday.
Speaking to reporters in the Fiji capital Suva, Australia's Foreign Minister Penny Wong said the test was "in the context of a rapid military buildup by China" that lacks "transparency and reassurance as to intent that the region expects".
Wong was in the Fijian capital as Australia formalised its treaty with Fiji, the Ocean of Peace Alliance. It marks Fiji's first alliance and Australia's fourth – after the United States, New Zealand and Papua New Guinea.
The treaty will be backed by Australia's government spending more than $1bn over a decade on measures against transnational crime, and health and infrastructure in Fiji, said Australian Prime Minister Anthony Albanese.
Signing the agreement with his Fijian counterpart, Albanese said it was "one of the most significant endeavours" Canberra had undertaken with any country.
Fijian Prime Minister Sitiveni Rabuka said the treaty was a "defining moment" in the ties between the two countries and marked a "very significant elevation of our bilateral relationship".
Asked by reporters whether he expected any pushback from Beijing, Rabuka said he believed China would "welcome the understanding".
"It does not threaten Fiji's relationship with China nor Australia's relationship with China," he said in remarks reported by Australia's national broadcaster ABC.
Last week Albanese also signed Australia's first comprehensive strategic pact with Vanuatu - after months of negotiations - which recognises Australia as Vanuatu's primary policing partner and bars the establishment of any foreign military base on the Pacific island.
Albanese will continue his Pacific trip on Tuesday in the Solomon Islands, where he will meet Prime Minister Matthew Wale to continue negotiations on a new treaty and become the first foreign leader to attend the country's independence day celebrations.
Wale, who was elected in May, is a former China hawk who has for years strongly opposed a security pact the Solomon Islands signed with China in 2022. He had on a visit to Australia last month floated the idea of a regional security pact.
Albanese is set to continue his round of Pacific diplomacy when he hosts the leaders of Tonga, Samoa and Papua New Guinea (PNG) in Brisbane on Wednesday.
The visit by PNG's Prime Minister James Marape marks the coming into force of the PukPuk treaty, signed last October, which gives Canberra access to PNG's military facilities and troops and allow as many as 10,000 Papua New Guineans to serve in Australia's military.
Last month, Australia's Foreign Minister Penny Wong said Australia and China were locked in a "permanent contest in our region".
