China has issued a stern warning to Australia after Canberra blocked the sale of Ausgrid to Chinese bidders.

China's commerce ministry lashed out at Australia on Wednesday over its decision to reject the $7.7 billion sale of its largest energy grid - Ausgrid - to Chinese bidders State Grid Corp of China and Hong Kong's Cheung Kong Infrastructure Holdings.

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Calling Australia a 'protectionist', the commerce ministry spokesperson Shen Danyang warned such decisions would seriously impact the willingness of Chinese investors to invest in Australia.

"Australia has rejected investments from Chinese companies twice this year, and these decisions were fueled by protectionism and has dampened Chinese investors' enthusiasm to tap opportunities in the country," Danyang said, reported Caixin English.

Aussie finance minister Scott Morrison last week rejected a bid by Chinese companies to buy 50.4 percent stake in country's biggest electricity network Ausgrid. The decision has not gone well with the Chinese government with country's embassy in Canberra expressing 'serious concern' over Aussie government' increasing protectionist tendencies.

The state-run newspaper Global Times, however, said Australia's decision regarding Ausgrid would not affect trade ties between two countries on the long term.

"The recent refusals from Australia will not have a negative impact on Chinese enterprises' enthusiasm for their investment in Australia from a long term perspective, but the economic and trade relations between the two countries will be affected to some extent for a short period of time," analyst Zhuang Rui told Global Times. 

Tagschina, Australia, Ausgrid, Commerce Ministry, Scott Morrison