A high-profile official has warned Australia could be a "big loser" if Prime Minister Scott Morrison fails to be more careful with his language on China, Australian media have reported.

"We have a massive trade surplus with China, which basically generates hundreds of thousands of jobs for West Australians, and we are the beneficiaries of that," said Mark McGowan, Premier of the Australian state of Western Australia, on 6PR, a Perth-based radio station.

"So I don't understand why we would say the system isn't working for us when we are in that position," McGowan, noting the strong awareness in Australia of the importance and value of iron ore sales to China, was quoted as saying by the Australian Broadcast Corporation, 

"I just think we need to be very careful in relation to our language and the way we approach these things because we could be the big losers out of it," McGowan added.