Dutton wouldn't confirm reports four Chinese journalists were questioned by Australia's national security agency ASIO in June, but said there had been "ASIO activity".
"Where ASIO has sufficient grounds for the execution of a search warrant or for activities otherwise, then they'll undertake that activity," he said.
"If people are masquerading as journalists or business leaders or whoever they might be and there's evidence that they are acting in a contrary nature to Australian law, then ASIO and the Australian Federal Police and other agencies will act."
He said there is no evidence that action by Australian agencies had put Australian journalists in China at risk. Asked about Cheng Lei, he said "we want to work very closely with the Chinese in relation to that matter and we'll continue to do that".
Beijing accused Australia of an interference in China's internal affairs and judicial sovereignty for providing diplomatic protection to Birtles, who reports for the ABC, and Smith, who works for the Australian Financial Review.
"Australia's actions in organising the two journos to hide in the embassy completely exceeds the scope of consular protection and in fact is interference in a Chinese legal case," Chinese Foreign Ministry spokesman Zhao Lijian said.
- AP