"The loyalty and commitment of Chinese Australians to Australia are repeatedly questioned as the mainstream media and a section of the Australian community singling out the Chinese community as being under the influence of China or even the Chinese Communist Party and not upholding the interests of Australia," Anthony Pang, deputy chairman of the Chinese Australian Services Society, said.

"The spreading of such prejudicial views create and lead to mistrust and intolerance in the Australian society against the entire Chinese community."

His comments are in a submission to a parliamentary inquiry on "nationhood" and the future of democracy in Australia, and come as tensions continue to heighten between Australia and China.

China's decision to deny Liberal MPs Andrew Hastie and James Paterson visas last week has been denounced by all sides of politics in Australia. Foreign Minister Marise Payne also called on China to end its detention of Uighur people, after the New York Times published documents showing the extent of China's crackdown on the Muslim group in Xinjiang. China described the leak as a "malicious" attack by elites on a successful program to eliminate terrorism and bring peace to the region.

The Chinese embassy in Canberra continued to push back on criticism in recent months, accusing the two Liberal MPs of disrespecting China's dignity and undermine the mutual trust in their criticism of China. "The colonial days of Western powers are long gone. China will never yield to colonisation of ideas and values," the embassy said, calling on the pair to repent.

It is the latest in a string of rhetorical clashes at the political level.

In October, the Federation of Chinese Associations of Australian Capital Territory, said Chinese people were fearful over anti-Chinese sentiment, and "the increasingly baseless smear campaign".

Now, Mr Pang of the Sydney group, has pointed to racism against Asians that stretched back to the early settlers but had surged with the increase in migration. Social cohesion was at risk and Chinese migrants were anxious.

He called for more English language programs, more interpreting services, bilingual social workers and case managers, and more funding for settlement and social inclusion groups. He called for more teaching racial tolerance, the benefits of multiculturalism and Australian values in schools.

The dictionary definition of a nation as a group of people of the same race who shared language, traditions and history, no longer applied, especially to a multicultural country like Australia.

He pointed to an Australian National University survey this year which found that 82 per cent of Asian-Australian had experienced discrimination. Pricewaterhouse Coopers had blamed systemic racism and prejudice for Asian people occupying just 3 to 5 per cent of senor leadership jobs, despite being 12 per cent of the population.

On Monday, former prime minister Paul Keating accused the media of hysteria over China, and said the subtleties of foreign policy were being supplanted by the phobias of a group of security agencies".

Speaking at a forum on China-Australia relations in Sydney, he said Australia should get over its alarm at the speed of China's rise and recognise that it would remain the predominant Asian power, the Guardian reported.

Also on Monday, crossbench Senator Rex Patrick, who has pushed for a parliamentary inquiry into Australia's relationship with China, said he would introduce legislation forcing parliamentarians to disclose any activity they had undertaken on behalf of a foreign principal in the decade before their election. That would include humanitarian work for a foreign government, legal or other advice for a foreign principal, or having been a member of a foreign political organisation that sought to influence an Australian political process.