Guo Jian, a former Tiananmen Square protester, was taken away on Sunday night from his home in Songzhuang, an art colony on the eastern fringe of Beijing, according to two of his acquaintances.
The detention of the 52-year-old Chinese-born Australian was said by a fellow artist to have been triggered by his recent work on a Tiananmen-themed art installation.
Consular officials had visited Guo yesterday as they "sought an explanation for his detention" from authorities, Australia's Department of Foreign Affairs and Trade said in a statement emailed to AFP today.
"It remains our understanding Mr Guo will be detained for 15 days and then required to depart China."
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Guo's detention came just days before the 25th anniversary of the June 4 military crackdown on pro-democracy protesters in Tiananmen Square, during which hundreds of people were killed - by some estimates, more than 1,000.
China censors any mention of the crackdown and ramped up already strict controls ahead of the anniversary. It also detained some 20 prominent liberal academics, lawyers and activists in recent weeks, according to the US-based group Human Rights in China.
Chinese foreign ministry spokesman Hong Lei said Guo had been detained "because of a fault in getting his residence permit", adding that police had notified Australian authorities.