Australia and New Zealand on Friday strongly urged China to refrain from stoking tensions in the South China Sea after its apparent deployment of surface-to-air missiles on a disputed island.

Tensions between China and its neighbours Vietnam, Malaysia, Brunei, the Philippines and Taiwan over sovereignty in the South China Sea were raised after Taiwan and US officials said China deployed an advanced surface-to-air missile system to Woody Island, in the Paracel Island chain.

"We urge all claimants in the South China Sea to refrain from any building of islands, any militarisation of islands, any land reclamation," Australian Prime Minister Malcolm Turnbull said after a meeting in Sydney with his New Zealand counterpart John Key. "It is absolutely critical that we ensure that there is a lowering of tensions."

Turnbull said if Chinese President Xi Jinping was serious about avoiding the so-called Thucydides Trap, where a rising power causes fear in an established power that escalates toward war, he must resolve disputes through international law.

"President Xi is right in identifying avoiding that trap as a key goal," said Turnbull, who is expected to visit Beijing in April.

New Zealand, the first developed country to recognise China as a market economy and to sign a bilateral free trade deal, was leveraging its relationship with China to urge measures to lower tensions, Key said.

"As we get a deeper and closer economic relationship with China, does that give us more opportunities to make that case, both privately and publicly? ... my view is yes," said Key, noting that both Australia and New Zealand are now also part of the Asian Investment Bank.

The comments come after Australian Foreign Minister Julie Bishop visited Beijing, where she bought up the missiles and the South China Sea in meetings with Chinese officials, including top diplomat, State Councillor Yang Jiechi.

Yang, in a statement released by the Foreign Ministry late on Thursday, said he told Bishop that Australia was not a party to the dispute, should stick to its promises not to take sides and "not participate in or take any actions to harm regional peace and stability or Sino-Australia ties".

The Chinese government has offered few specific details in response to the missiles claim, while accusing Western media of "hyping up" the story and saying China has a legitimate right to military facilities on territory it views as its own.

Beijing has been angered by air and sea patrols the US has conducted near islands China claims in the region. Those have included one by two B-52 strategic bombers in November and by a US Navy destroyer that sailed within 12 nautical miles of Triton Island in the Paracels last month.

An influential Chinese state-run tabloid, the Global Times, in an editorial on Friday described the HQ-9 missiles that are apparently now on Woody Island as "a typical type of defensive weapon", but warned the People's Liberation Army may feel compelled to deploy more weapons.

"If the US military stages a real threat and a military clash is looming, the PLA may feel propelled to deploy more powerful weapons," it said.