CANBERRA (AFP) - Taiwan's proposed referendum on joining the United Nations is "completely inappropriate", Australian Foreign Minister Stephen Smith said Tuesday.

Speaking at a news conference here with visiting Chinese Foreign Minister Yang Jiechi, Smith said Australia adhered "absolutely" to the one-China policy which it had maintained for more than 35 years.

"We are very concerned to ensure that action is not taken in Taiwan or in the Taiwanese Strait which would cause concern or potential for disharmony in the strait itself," he said.

"That is why I have told Foreign Minister Yang that Australia regards very much as completely inappropriate the referendum which on Friday was approved for putting to the electorate in Taiwan.

"It does not lead to stability nor harmony in North Asia, and we would be much better off if that referendum had not been proposed," Smith said.

China warned Saturday that Taipei's decision to hold a referendum next month on whether to try to join the UN under the name "Taiwan" was a move towards formal independence and could threaten peace in the Asia Pacific region.

China regards Taiwan as its territory awaiting reunification after they split at the end of a civil war in 1949.

Taiwan, under its official name the Republic of China, lost its UN seat to the mainland in 1971 and is now only recognised diplomatically by 23 countries.

Yang is in Canberra for an inaugural "strategic dialogue" on key global and Asia-Pacific issues, which is expected to become an annual event.

The two countries share a strong trade relationship, with China's hunger for raw materials to feed its rapidly-growing