China told students on Tuesday to be "cautious in choosing to study in Australia" citing concerns about the coronavirus and racism, further ramping up diplomatic tensions between Beijing and Canberra.

The advisory was the latest in an escalating spat, ignited by Australia's call for an independent inquiry into the origin and handling of the coronavirus in central China last year.

Beijing reacted furiously to the demand, targeting Canberra on a number of fronts, including tourism, trade and now Chinese students, the biggest overseas group in Australian universities.

"The Ministry of Education reminds all overseas students to do a risk assessment and be cautious in choosing to study in Australia or return to Australia to study," it added.

The ministry also mentioned "multiple discriminatory incidents against Asians in Australia" during the pandemic, and said COVID-19 remains a threat.

"The global novel coronavirus outbreak has not been effectively controlled yet and there are risks in international travel and reopening campuses," it added.

The rare statement came a day after a foreign ministry spokeswoman warned of "a lot of discrimination" against Chinese people in Australia -- and days after Beijing told citizens not to travel there at all.

Beijing reacted furiously to Australian support for a COVID-19 inquiry, targeting Canberra on a number of fronts
Beijing reacted furiously to Australian support for a COVID-19 inquiry, targeting Canberra on a number of fronts AFP / WANG Zhao

With Australian borders closed to all non-essential inbound and outbound travellers due to the pandemic, Beijing's travel advice was largely symbolic.

While Canberra officials have acknowledged racist attacks and incidents, they have dismissed the idea that the country is unsafe to visit.

In response to Australia backing the call for an independent virus inquiry, the Canberra's Chinese ambassador had threatened a widespread consumer boycott of Australian products -- a warning followed up by a bar on imports from four major Australian beef producers.

And then in May, China imposed an 80 percent tariff on Australian barley over dumping allegations, a move set to cost at least Aus$500 million (US$350 million) a year, according to five of the nation's grain growers.

The latest caution about universities is likely to fuel more concerns about the sector in Australia.

A lobby group warned last week that universities in the country could lose up to US$11 billion as an indefinite coronavirus border closure locks out the foreign students who keep the sector afloat.

Education is Australia's third-largest export -- behind only iron ore and coal -- with more than 500,000 international students enrolled last year, bringing about Aus$32 billion into the economy.