Australia will seek to ensure China contributes to a fund set up to help poor countries hit by climate change, rather than receive money from it.
The United Nations COP27 conference in Egypt this month decided to set up the "loss and damage" fund in recognition of developing nations' struggles with storms, floods and heatwaves.
The fund is expected to initially receive money from developed countries and private-sector sources.
Chinese officials have said they should not be required to pay into the fund, which is the subject of further global negotiations on how it will operate, because the country is considered a "developing" nation.
In parliament on Tuesday, Liberal MP Alex Hawke asked Climate Change Minister Chris Bowen whether China could be a recipient of funds, including those contributed by Australia.
Mr Bowen, who represented the government at the COP27 talks, said as part of the negotiations Australia successfully argued the donor list should be reviewed so countries that were not rich in 1992 but had since become "developed" should be contributors.
"That is exactly reflected by the text, which indicates a multiplicity of donors and a revision of the database," Mr Bowen told parliament.
He said in an earlier interview the government had yet to decide how it would engage with the fund.
"The cabinet will - in due course, once the fund is up and running - look at all the rules and all the structure and consider how we engage," Mr Bowen told ABC Radio.
However, he pointed to a $900 million increase in Australia's Pacific foreign aid budget as a sign of its commitment to countries in the region.