China blames Australia for strained relations as trade suffers

[CANBERRA] China has issued a fresh rebuke to Australia as tensions between the two nations continued to simmer, with Foreign Minister Wang Yi blaming its trading partner for the spat and saying it was up to Australia to get their relationship back on track.

"Due to the Australian side's reasons, the relationship between China and Australia has encountered some difficulties," Mr Wang said on Tuesday. "If Australia is genuinely hopeful for getting the bilateral relationship back on the right track, Australia should discard its traditional thinking and take off its tinted glasses to take a proactive approach towards China's development."

The comments, coming directly after a meeting between Mr Wang and his Australian counterpart Julie Bishop in Buenos Aires on Monday, show how far relations have soured since December, when Prime Minister Malcolm Turnbull said reports of Chinese meddling with media, universities and lawmakers were a catalyst for tougher anti-foreign interference laws.

The legislation, yet to pass Parliament, will ban foreign political donations and require people or organisations acting in the interests of overseas powers to register and disclose their ties.

The US, Japan and countries in South-east Asia that haven't aligned themselves with China will be watching this closely, said Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute and a former adviser to the government on defense policy.

"Australia shouldn't back down and I don't think the Chinese will, so this cooling off in the relationship could well continue," Davis said by phone. "Australia needs to set an example that nations can maintain a strong resolve against Chinese pressure and not allow China to dictate their foreign and defense policies."

Business Hurting

Meanwhile, the business community is concerned the spat is hurting trade, with a planned increase in beef exports stalled by China and Treasury Wine Estates Co. saying last week Chinese customs officers have delayed shipments due to new requirements that "seemingly only apply to Australian Country of Origin wines."

Bishop used a Sky News interview on Tuesday to downplay the spat and said she intends to visit China "very soon," with Turnbull to follow later this year. Still, Wang said on Tuesday that exchanges and cooperation between the two countries have been affected by the disagreements.

"China attaches importance to the China-Australia relationship and we would like to communicate with Australia on how to take concrete measures to improve the bilateral relationship," Wang said.

BLOOMBERG