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It's innocent until proven guilty in many countries so you would not be legally seen as a criminal until after conviction.
Correct.
Assessment of a crime for extradition involves the Attorney General Department of the Requesting Country (Australia) to lodge a government-to-government request. They basically hand over the police brief of evidence and explain why the offence is so serious that they are requesting the person be handed over by the Sending Country (China). The sending country may seek all sorts of assurances, for example about potential sentence in the receiving country, and will do their own in-house assessment of any political blowback, whether precedent will be established by agreeing/not agreeing - all sorts of considerations that the public probably don't even think about.
Assessment of a crime for extrajudicial trial in China means the Chinese would receive Australia's evidence, do their own investigation and then assess whether it's (a) possible and (b) worthwhile to the community to charge and try a person under Chinese law. Its is a very time intensive and labour intensive process. Witnesses including the family, medical experts, Australian police etc may have to give evidence in China (in many countries video evidence is not yet enshrined in law). I imagine there would be an assessment of benefits to the international Australian-Chinese relationship, to China's reputation in law enforcement circles, whether a precedent would be established etc.
The suspect needs to be tried somewhere, but whether it's practically possible is a fascinating study of the inner workings of international law.