Will China people really lose their China citizenship when they become Australian citizens?

Yes, Article 9 of the current Nationality Law of the People's Republic of China clearly stipulates: "China citizens who have settled in a foreign country voluntarily join or acquire foreign nationality will automatically lose their China nationality." According to this regulation, China citizens who have obtained foreign nationality need to apply for a Chinese visa when they return to China because they have lost their China nationality, which has caused great inconvenience to overseas Chinese in their long-term travel and residence in China.

In other words, if you apply for a Chinese visa for the first time after naturalization, you must hand in your original China passport, and the staff will cut a corner of your passport, which means that you will automatically give up your China nationality.