The number of Chinese visitors heading Down Under has outstripped the UK, making the Middle Kingdom Australia's second biggest market behind New Zealand.
Tourism Minister Martin Ferguson says despite challenging global economic conditions, Australia has continued to see steady growth in the number of international holidaymakers.
"Decreases in visitor numbers from other markets are being offset by increases from Asia," Mr Ferguson said in a statement.
"A recent positive recovery in visitors from the United States is also helping to ensure good growth, particularly in the last few months."
Tourism Research Australia's latest International Visitors Survey, released on Wednesday, shows the number of international holidaymakers coming to Australia increased by three per cent in the year ending September 2012.
Arrivals from China increased 17 per cent to 573,000 - ahead of the UK's 558,000.
Tourism and Transport Forum (TTF) says the rise in international tourist numbers, length of stay, and spending, shows the value of the tourism sector as the mining boom wanes.
"The good news is that despite weak global economic conditions and the strong Australian dollar more people are coming to Australia," TTF chief John Lee said.
"What this shows is that Australia is a desirable destination with world-class tourism products, accommodation, attractions and experiences."
The Australian Tourism Export Council (ATEC) says Asian tourists made up nearly half the total international spend in the year to September.
"Importantly the total trip spend by Chinese visitors eclipsed the $4 billion mark, up 16 per cent for the year," ATEC Managing Director Felicia Mariani said.
"Remarkably, China has now become our second largest source market within a period of less than 15 years."
Early in the new year ATEC will launch its Welcoming Chinese Visitors strategic tourism investment grant, to give operators the tools and knowledge to connect with, and service, the Chinese market.