Australia won't budge. It's in their culture, and it's only going to change on a generational timescale.
Australia is bascially becoming China's Cuba. It'd be stupid to impose a broad sanction against doing business with Australia unless American missiles or bombers are actually deployed there, but travel restriction is a good start. Make it illegal for Chinese citizens to travel to Australia for tourism, studying for non-research degrees or obtaining new permanent residency without obtaining approval, which will in principle be denied. If things continue to deteriorate, make it illegal for Chinese citizens to retain existing Australian permanent residency. I have lived in New Zealand and Australia for a total of almost 10 years. New Zealand is just a superior country in every possible way. And they invented pavlova.