Foreign Minister Penny Wong met with her Chinese counterpart Wang Yi on the sidelines of ASEAN talks in Manila on Tuesday evening.
"You speak about the importance of mutual understanding. I agree, and I expect we will discuss our concerns ... including around peace and stability in our region, safe and professional military conduct, and the importance of transparency and reassurance of intent," Senator Wong said in opening remarks.
Senator Wong noted the "strong concerns" expressed by many Pacific Island countries about the submarine-launched missile earlier in July.
The two foreign ministers also discussed the importance of peace and stability in the Indo-Pacific.
"You've often heard me say that we will cooperate where we can and disagree where we must, and we want to continue to engage because we believe that is in our national interest," Senator Wong said.
Australia was only given a few hours' notice by China of the test, which was launched within hours of Prime Minister Anthony Albanese signing a new defence alliance with Fiji.
The missile is understood to have landed near Tuvalu.
Mr Albanese slammed the launch as a "provocative act" while other Pacific nations including New Zealand, Tuvalu and Fiji condemned the incident.
Solomon Islands Prime Minister Matthew Wale was standing beside his Australian counterpart in Honiara in early July when he said the test was "not the act of a friend".
Mr Albanese has previously flagged a strong statement would be issued by the Pacific Islands Forum, but the group's disagreement on the wording of the text has resulted in a delay.
A foreign ministers' meeting of the forum will be held in August, where the issue is likely to be discussed.
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