If Beijing pursues paths outside the established international order, such as blocking freedom of navigation exercises, it could damage Australia's prosperity, Mr Marles warned.
"Sixty per cent of our trade goes through the South China Sea, our prosperity is based on those (international) rules," he told 4BC radio on Monday.
"The issue here is that in the South China Sea, for example, China is trying to assert a whole lot of ideas which are pretty inconsistent with the rules of the road."
Mr Marles, who is also defence minister, says the government will continue to stand up against an increasingly aggressive China.
"What we need to be doing is making sure we are ... engaged professionally, diplomatically, soberly but we completely, unflinchingly, speak to our national interests and make sure we have the courage to do that," he said.
"And we will whenever that differs from the actions of any country, which includes China."
Europe is also increasingly aware of China's actions in the Indo-Pacific, with one of Australia's European partners calling for restraint.
In a joint media conference with his Australian counterpart Penny Wong, Latvian Foreign Minister Edgars Rinkevics said nations in the Pacific region needed to remain calm amid "a rising assertiveness".
"It is very important to understand that China is also really carefully watching what is happening in Europe, what is happening in Ukraine, and has adjusted its policies and stance in this part of the world," Mr Rinkevics told reporters in Canberra on Monday.
"It is very important we work together and we provide the same kind of message of the need to have restraint, not to overreact."
The US deputy secretary of state was also in Canberra to discuss regional cooperation with Senator Wong following a trip through Pacific island nations.
Wendy Sherman travelled to the Solomon Islands over the weekend to meet with Prime Minister Manasseh Sogavare after promising to be more present in the region following a Sino-Solomons security deal inked earlier this year.
Speaking ahead of her meeting with Senator Wong, Ms Sherman indicated further action on climate change by the US and Australia will help promote their standing in the Pacific.
"We are working together to combat climate change," she said.
"I certainly heard in my travels to Samoa, Tonga and Solomon Islands, that climate is such an existential threat and it's understood so powerfully out here."
US President Joe Biden is due to host leaders of Pacific island nations at the White House in September.
Neither Senator Wong nor Ms Sherman named China in their remarks ahead of their meeting.
The meeting comes after a tense stand-off following US Speaker Nancy Pelosi's visit to Taiwan last week.
In response, China shot 11 ballistic missiles over Taiwan and close to Japan, in addition to war-gaming an invasion of the island.
The Chinese government said it was the "victim" and accused Senator Wong of "finger pointing" after she last week condemned Beijing's "disproportionate and destabilising" actions.
Senator Wong said Australia was not the only nation concerned about escalation and it was critical the "temperature is lowered".
"The region is concerned about escalation, the region is concerned about the risk of conflict," she said.
When asked if she will contact Taiwan's government, Senator Wong said: "We will continue to act in ways consistent with our longstanding bipartisan 'one China' policy."
Opposition Leader Peter Dutton was more outspoken, saying he was pleased Ms Pelosi visited Taiwan.
"Yes, she should have, and I'm pleased she did because the reaction from China is completely over the top and it's disproportionate," the former defence minister said.
