Mr Fitzgerald said it was significant the signatories included notable critics of the Chinese government "and people who have long warned in a responsible way about the challenge of China as a Great Power and urged Australia to prepare for this".

The scholars' letter says wider public consultation is needed on the legislation.

But, adding further heat to the debate, a prominent Australian critic of the Chinese government, John Hugh, was barred on Tuesday from entering China.

The former Parramatta councillor is the spokesman for Australian Values Alliance, which last week co-hosted the launch of Clive Hamilton's controversial book about Chinese government interference, Silent Invasion. Hugh was also a source for the book.

Mr Hugh, 51, was travelling with his elderly mother to bury his father’s ashes after his death last year, hoping to make use of a 144-hour transit visa exemption.

He said police boarded the plane when it landed in Shanghai and walked straight to him.

“‘Are you Mr Hugh?’ I said, ‘Yes’, and then they asked me to present a passport,” he said.

His mother was allowed to enter the country, but he said he was rushed through the airport and told to switch off his phone before being escorted onto another plane back to Sydney. He was in Shanghai for less than an hour.

“I asked them ‘What is the reason?’ They said, ‘You should know’,” Mr Hugh said.

Mr Hugh said the incident signified that Beijing’s move to muzzle critics was getting stronger.

“They do have control and they want to scare people off,” he said.

It also comes as China's president Xi Jinping moves to tighten the Chinese Communist Party's control on the levers of the country's propaganda machine. State run television and radio broadcasters will be merged into a new body called Voice of China to allow "correct guidance of public opinion", and the shadowy party body, United Front, will absorb three state agencies that had dealt with religious groups, overseas Chinese and ethnic minorities.

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The letter by Australian China scholars said they were sceptical of key claims in the foreign interference debate.

"We see no evidence, for example, that China is intent on exporting its political system to Australia, or that its actions aim at compromising our sovereignty," the letter said.

Where criticism of China's actions is "substantiated by clear evidence, there should be no hesitation in applying scrutiny and appropriate penalties".

But the letter warned that Chinese Australians deserve the same freedoms as anyone else in a democratic system to express opinions and support or criticise any policy "without it being dismissed by accusations that they speak on behalf of hostile foreign interests".

The signatories include Jocelyn Chey, who received an Order of Australia, and spent 20 years in the Department of Foreign Affairs working on the Australia-China relationship.