Australian Prime Minister Scott Morrison on Thursday staunchly defended a Hong Kong-born politician who is under mounting pressure over her links to the Chinese Communist Party.

Gladys Liu, the first Chinese-Australian woman elected to the country's parliament, has been accused of being a member of organisations linked to China's ruling party.

Public broadcaster ABC revealed that Liu was a member of several organisations linked to the United Front Work Department -- a powerful group that promotes the party's interests at home and overseas, including by recruiting ethnic Chinese abroad.

Liu initially claimed she could not remember being a member of one of those organisations, the China Overseas Exchange Association, but has now admitted she had previously held a role.

Morrison on Wednesday said Liu's initial denial came in a "clumsy interview" by a new member of parliament.

He levelled allegations of racism at critics, saying there was a "very grubby undertone" to the questions surrounding her alleged ties to a foreign government.

"It is a ridiculous suggestion and I think it is an insult to every single Chinese-Australian in this country," he told reporters in Canberra.

That was a charge angrily denied by the opposition Labor Party.

"The only person linking these specific and serious concerns about Ms Liu to the entire Chinese-Australian population is Scott Morrison and he should stop," said Malaysian-born Labor senator Penny Wong.

The Herald Sun reported that Morrison's Liberal Party was warned about Liu's activities by Australia's spy agency ASIO before choosing her as a candidate for a fiercely contested seat with a large Chinese population.

She also admitted she had served as the honorary president of the United Chinese Commerce Association of Australia and the Australian Jiangmen General Commercial Association, but had since terminated her affiliations.

Australia recently adopted a series of measures to limit foreign interference in politics, after it emerged that both parties took money from a Beijing-connected billionaire who has now been banned from the country.

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