China is "surprised" New Zealand has weighed into a tense war of words between the Middle Kingdom and Australia over a graphic Twitter image, asking what business it is of Aotearoa's.

Australian Prime Minister Scott Morrison on Monday demanded an apology from China after the Asian nation's foreign ministry spokesperson Zhao Lijian posted an inflammatory image on Twitter.

The digitally-altered image shows an Australian soldier holding a knife to the throat of a young Afghan child - a reference to a recent report alleging Australian special forces unlawfully killed 39 Afghans over a period of years. The report makes mentions of unsubstantiated claims that two 14-year-old boys were also killed by soldiers. 

New Zealand Prime Minister Jacinda Ardern on Tuesday said Aotearoa had "registered directly with Chinese authorities our concern over the use of that image", which she described as "not factually correct". Ardern has the backing of National's Judith Collins, who said the picture sounded "abhorrent". 

Kiwi Foreign Affairs Minister Nanaia Mahuta said: "New Zealand doesn't support disinformation that has the potential to be inflammatory".

Chinese foreign ministry spokesperson Hua Chunying has now hit back, asking why New Zealand is getting involved.

"Frankly, I was very surprised when I read it in the news. Does this matter have anything to do with New Zealand? Can it be that New Zealand agrees with or even supports Australia's deeds?" she said at her daily press conference on Wednesday morning (NZT).

"Like I said, we have pictures and other facts including the Australian Defense Department's report on this matter. The truth and the merits of this matter are crystal clear. If needed, our journalist friends, China and Australia can all provide these materials to New Zealand."

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Speaking to reporters on Tuesday, Ardern said New Zealand naturally took an interest in our partners. Australia is New Zealand's closest ally, while China is our largest trading partner.

"Whether it is Canada or Australia or indeed the United States, we observe closely relationships with our major trading partner China and others. But, of course, we always conduct our relationship in our own interests," she said.

"We will speak up on issues that we have concerns about, we will stick to our independent foreign policy, but that doesn't stop us observing what is happening with others."

She said she hadn't spoken to Morrison about the image prior to New Zealand expressing its concern.

Following Ardern's remarks on Tuesday, Newshub contacted the Chinese Embassy here in New Zealand for comment, but didn't receive a response.

New Zealand has previously seen verbal backlash from China after speaking out on issues like judicial independence in Hong Kong and the treatment of the Uighur people in Xinjiang. Just two weeks ago, China criticised the Five Eyes group - which includes New Zealand - for releasing a statement expressing concern at the Middle Kingdom's Hong Kong policy.

China's Hua also questioned on Wednesday why the Twitter image was being described as a "falsified image". 

"Australia accuses China of using a falsified or fake photo, and even of spreading false information, but such an accusation is in itself a false one. What's going viral online is not a "photo", but a graphic created with computer techniques by a young Chinese artist.

"Computer-generated graphics and falsified pictures are two different things. The graphic depicts a fact because its creation is based on the inquiry report issued by the Australian Defense Department."

She said Australia was making a fuss about the image because it wants to "divert attention" from the report and "avoid the real issue". 

"It is under immense criticism and condemnation from the international community for the ruthless killing of Afghan innocents by some of its soldiers, but the Australian side wants to turn that into a tough-on-China position. Everyone sees that very clearly."

The Chinese Embassy in Canberra on Tuesday accused people of "misreading" Zhao's tweet. 

Twitter has refused to pull it from the social media network, but has added a "sensitive media" warning to it.

Relations between China and Australia have soured significantly over the last year, especially in the wake of Australia calling for an inquiry into the origin of COVID-19 in the Middle Kingdom. Australia has also been vocal in criticising Beijing for its imposition of a new national security law in Hong Kong and the human rights abuses in Xinjiang.

China has bitten back by taking a number of actions on trade and exports. For example, on Friday, China announced it would impose temporary tariffs of up to 212.1 percent on wine imported from Australia. 

After the military report was released in November, the Australian Defence Force chief Angus Campbell apologised to Afghanistan and it has been reported that Morrison rang the Afghan leader to express his sorrow. The Australian Prime Minister hasn't shied away from condemning the alleged crimes, describing the report as "disturbing".