Cheng Lei has been formally arrested after more than six months in detention, accused of illegally supplying state secrets overseas.

China has warned Australia not to interfere in the case, saying its investigation is being carried out in accordance with the law.

Senator Payne said Australia would always stand up for the interests of its citizens.

"It is entirely appropriate for Australia to observe that she deserves the basic standards of justice, procedural fairness and human treatment to be met in accordance with international norms," the minister told ABC radio on Tuesday.

"That doesn't constitute interference with the Chinese legal system."

Senator Payne said she would not speculate on why Cheng had been arrested on national security grounds.

However, Chinese police swooped on Cheng last year after she began criticising the government's handling of the coronavirus pandemic.

There is also speculation her arrest could be linked to strained diplomatic relations between Australia and China.

Liberal senator James Paterson, who chairs the parliament's intelligence and security committee, said he hoped Cheng's arrest was not part of a tit-for-tat political spat.

"If it were the case, it would amount to the Chinese government admitting that it takes political hostages in a retaliatory way," Senator Paterson told ABC radio.

Another Australian, Yang Heng Jun, has been detained in China for more than two years.

The writer and pro-democracy advocate has been accused of espionage. His case is before the courts.

Cheng was born in China but moved with her parents to Australia as a child.

She studied commerce in Queensland before working for several major companies in Australia.

After moving to China, she worked as a high-profile business anchor on a state-owned television network.

Videos of Cheng were removed from Chinese websites after she was detained.

Her two young children are being cared for by their grandmother in Melbourne.

Cheng's niece Louisa Wen, speaking on behalf of the family, said the children were devastated by their mother's absence.

"I feel like the children don't fully understand the situation, so it's probably quite tough on the kids wondering what's going on," she told the ABC.

"Every time we do something fun, we're thinking of her and how she can't enjoy these things with us."

Australian Associated Press