The country's top diplomat has labelled western China a priority for boosting Australia's overseas representation and enhancing what is described as an only "modest" diplomatic footprint.

Foreign Affairs department chief Dennis Richardson also said free trade talks with China were "frustratingly slow" and there was little prospect a deal would soon be struck.

"There is as much hard work ahead of us as what there is behind us," Mr Richardson told a parliamentary inquiry this morning.

Australia has an embassy in Beijing and consulates in Hong Kong, Shanghai and Guangzhou, but no offices in the more rural western regions.

The inquiry into Australia's overseas representation has been told that Australia has the lowest number of overseas embassies of any comparable country — despite record numbers of Australians travelling abroad.

One of the Australia's biggest banks has warned in a submission that more diplomats are needed in Asia to cope with a massive geopolitical transformation, where Chinese provinces will eventually have a bigger economy than that of Australia.

Alex Thursby — chief of ANZ overseas operations in Asia-Pacific, Europe and America — said Australia needed a greater diplomatic presence to help business and exports in big overseas markets.

Mr Richardson said Australia had been a leader in terms of diplomatic representation in China 20 years ago but this had now fallen back.

He said Mongolia — the resource rich country to China's north — was another nation where Australia needed to open an embassy.

Mr Richardson told this morning's hearing that Australia would ideally have a consulate on the holiday island of Phuket in Thailand to help Australians in strife.

"We should think of Phuket like we do Bali," he said.

Diplomacy is also attempting to keep pace with the modern era, with diplomats increasingly turning to social media such as Twitter and Facebook to reach a wider audience.

But Mr Richardson said Australia was deliberately not a leader in so-called "e-diplomacy" — mostly due to a lack of resources.

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