The Prime Minister has refused to criticise China’s threatening behaviour towards Australia’s Pacific neighbours as the region’s leaders gather in Palau for annual talks which this year include official observers from Taiwan.

Beijing has warned there will be “consequences” for Taiwan’s presence at this year’s Pacific Islands Forum leaders meeting after the democratic island’s foreign minister appeared at the event’s opening ceremony overnight.

China’s Pacific envoy Qian Bo said his nation had “serious concerns” about the space being given to the nation which it claims as its own territory, although he insisted Beijing had the “understanding and support” of most Pacific countries.

“Taiwan is not a dialogue partner with the forum, so we have serious concerns,” Qian Bo told reporters after the opening ceremony.

“We have made our position very clear to the government of Palau and the secretariat.”

The Chinese diplomat also said he would make a statement noting Beijing’s anger when he attended Tuesday’s official meeting between Pacific nations and dialogue partners, which does not include Taiwan’s representatives.

Taiwan Foreign Minister Lin Chia-lung is expected to meet with the leaders of the three remaining Pacific countries that recognise his nation - Marshall Islands, Republic of Palau and Tuvalu - but has also interacted with other officials including from the US.

Asked on Tuesday whether he believed China was bullying the event’s host nation, Anthony Albanese dodged questions on the matter and refused to criticise Beijing’s actions.

“This is this is a paradise here in Palau, and one of the things that is obvious as you’ve been walking around here is how friendly and how peaceful this place is,” Mr Albanese told reporters on the sidelines of PIF.

This year leaders from Vanuatu, Kiribati, the Solomon Islands, Fiji and Samoa have all pulled out of participating in the PIF, but Mr Albanese declined to comment on concerns China was pressuring them not to attend.

“I’m focused on members of the Pacific family. And that is precisely the meetings that I have scheduled here. And I think this is primarily a gathering of the Pacific family, the members of the Pacific Islands Forum. And I look forward to the engagement,” Mr Albanese added.

“From time to time, the Pacific Islands Forum has had issues with people not participating. Everyone’s participating at this forum … there is a presence here. And everyone is focused on outcomes at this forum.

“I’m Australia’s spokesperson, and I’m speaking on behalf of Australia,” Mr Albanese said as he was joined by his Climate Minister Chris Bowen and Pacific Islands Minister Pat Conroy.

Pressed on whether it was appropriate for China to make threats because of the invitation given to Taiwan, Mr Albanese responded: “the Pacific Islands Forum determines what happens here, not any other country”.

After Taiwan attended the PIF’s opening ceremony on Monday, Qian Bo warned that “there will always be consequences”.

“It’s not a threat,” the diplomat said without specifying what the consequences would be.

“This is objected to by all, so this should not have happened. We think it’s very inappropriate to do so.”

While Mr Albanese did not criticise Beijing’s actions he did reiterate Australia’s concerns over the Chinese military’s test firing of a nuclear-capable weapon into the Pacific ocean earlier this year.

“We’ve made it very clear that that is not acceptable. It’s not the act of a friend. It was a provocative action, and it was inappropriate, and we’ve made our position very clear.”

Ahead of formal talks on Tuesday Mr Albanese nominated climate change, security and transnational crime are the big-ticket items at this year’s forum.

New Zealand’s foreign minister Winston Peters told the ABC he was “highly suspicious” about the lack of attendees, after earlier alluding to foreign interference as being a factor.

“(China) might make a show of this. I’d be astonished if they’re reading the room properly, because this happens to be an 18-country organisation where the insiders get to decide what happens, not outsiders,” he said.

Earlier PIF host and Palau’s President Surangel Whipps Jr, whose country is one of the few nations that still diplomatically recognises Taiwan, warned outside partners against trying to impose their will on the 18-member Pacific Islands Forum.

“The world increasingly recognises the strategic importance of our region. We welcome friends and genuine partnerships. Yet attention is not the same as respect,” President Whipps said.

“Our partners are welcome to sail with us, but they do not choose our destination. The Pacific agenda must be driven by us, for us.”

Last month The Nightly revealed that representatives from Taiwan’s de facto embassy in Canberra had been invited to attend the Australian Labor Party’s conference in Adelaide which infuriated Chinese diplomats who left the event in protest.