China's deputy ambassador has refused to distance himself from an incendiary fake war crimes photo, instead questioning why Scott Morrison reacted so strongly to the scandal.
Wang Xining on Friday said the doctored image, showing an Australian soldier holding a bloodied knife to the throat of an Afghan child, had actually raised awareness of alleged Afghan war crimes.
"Now there is much larger visibility of the Brereton Report in China. More people are attentive to what has happened in Afghanistan," he told reporters on Friday.
"People are wondering why a national leader would have such a strong reaction to an artwork done by a young artist in China."
Mr Morrison earlier this week demanded China apologise for promoting the "repugnant" fake photo.
The European Union has blasted the "irresponsible, insensitive" tweet from a senior Chinese official.
Australia is calling on China to apologise for the fake photo. Source: Supplied
Representatives from the powerful political and economic bloc recently raised the issue with a Chinese vice-foreign affairs minister.
"We consider the deliberate dissemination of a fabricated image via social media accounts affiliated with China's Ministry of Foreign Affairs to be irresponsible, insensitive, and not at all constructive, particularly given the subject in question," an EU spokesman told AAP.
"Such behaviour and use of information tools to disseminate fabricated images or information cannot be justified."
Australia's intelligence allies including the United States, New Zealand and Canada have all criticised the aggressive Chinese tweet.
The EU is closely following deteriorating relations between China and Australia, with trade and diplomatic ties sinking to a new low.
"We hope that China and Australia can re-engage in dialogue, avoid escalation and unilateral pressure," the spokesman said.
The diplomatic spat was also raised at a recent EU-Australia leaders meeting.
Mr Wang played down a barrage of attacks on Australia in Chinese state media and dismissed a list of grievances recently released by the embassy as "just some examples of what we disagree with".
He denied there was a diplomatic deep freeze in place, despite the fact Australian ministers cannot get their Chinese counterparts on the phone.
And despite a string of recent trade strikes, the deputy ambassador denied China was pursuing a concerted campaign targeting Australian goods.
