The Federal Government has been warned by Treasury about emerging threats to China's rapid economic growth.

A working paper posted on Treasury's website identifies rising inflation as one of many threats to China's growth.

China is Australia's largest trading partner and a significant buyer of our mineral resources.

The chief investment strategist at Russell Investments Andrew Pease has told ABC News Breakfast he sees both long-term and short-term risks to Chinese growth.

"The short-term one is the one that everyone talks about which is about rising inflation, the fact that China's keeping this undervalued exchange rate and that they've got over-stimulatory policy because of that, so they may have to tighten by more and cause the economy to slow," he said.

"But there's a longer-term issue in that the Chinese economy is very unbalanced because they've been building up a lot more debt than the official numbers show, and they're running very, very high investment levels."

Mr Pease says if China does slow there will be ramifications for the Australian economy which is more closely linked to China than ever before.

"Quite often when the Australian economy hits a downturn we have this wonderful stabilising impact of the exchange rate falling, which trends to insulate our economy from the rest of the world," he explained.

"But given how closely we are linked to China we may actually experience a much deeper downturn if China does actually go south."