Ms Shuai disappeared from public view for two weeks after accusing former vice-premier Zhang Gaoli of sexual assault.
She has since appeared in video calls expressing her safety.
Nonetheless, the Women’s Tennis Association this week decided to suspend all tournaments in China, with chair Steve Simon saying he could not “in good conscience” ask athletes to compete in the country.
Mr Swan told Today that Australia needed to be “consistent” in its approach.
“We should be calling out the human rights abuses in China, which are truly dreadful,” he said.
“Sport is one way to do that, although I would recall that in 1980 there was a call for a boycott of the Moscow Olympics. That didn’t end well and it didn’t work.”
That boycott was launched by the US in response to the Soviet invasion of Afghanistan.
Rare 19th-century images show China at the dawn of photography
In turn, the USSR and its allies boycotted the 1984 Los Angeles Games.
“We need to consistently, at every level, through government and non-government organisations, to be calling out human rights abuses in China,” Mr Swan said.
“What’s happening in tennis is replicated right across the board in that country. So I think we need to be more consistent as a country in calling out these abuses, and this action by the tennis authorities is welcomed.
“But I don’t think we should necessarily be seeing it in the context of athletic participation in the Olympics, for example.”