China takes exception to Australia's action on foreign interference

CANBERRA, Australia -- China scolded Australia on Wednesday over its plan to ban foreign interference in politics -- either through espionage or financial donations -- in a move motivated largely by Russia's alleged involvement in last year's U.S. election and China's growing influence on the global political landscape.

Prime Minister Malcolm Turnbull said this week foreign interference in politics would be outlawed under updated treason and espionage laws. The announcement comes as a U.S. investigation into alleged election meddling by Russia continues and follows concerns about Chinese money and influence in Australian politics.

"Foreign powers are making unprecedented and increasingly sophisticated attempts to influence the political process, both here and abroad," Turnbull told reporters Tuesday.

The Chinese Embassy in Australia responded in a statement Wednesday that said: "China has no intention to interfere in Australia's internal affairs or exert influence on its political process through political donations."

"We urge the Australian side to look at China and China-Australia relations in an objective, fair and rational manner," the statement added.

Under legislation expected to be introduced in Parliament this week, it would become a crime for a person to engage in conduct on behalf of a foreign principal that will influence a political or governmental process, including opposition party policy, and is either covert or involves deception.

The foreign influence and interference package will be complemented by another bill on electoral reform that will ban foreign political donations.

The laws would criminalize acts such as opposition Sen. Sam Dastyari's soliciting of a donation from a Chinese businessman, Huang Xiangmo, to cover personal expenses; it got Dastyari demoted last week. Dastyari then misrepresented Australia's policy on China's sweeping territorial claims in the South China at a news conference held exclusively for Chinese reporters and attended by Huang.

Dastyari has been dubbed "Shanghai Sam" for his dealings with Huang, a wealthy Sydney-based donor to Australian political parties whom Australian security services suspect is linked to the ruling Chinese Communist Party.

The Australian government argues Dastyari should quit Parliament for giving Huang counter-surveillance advice last year when he told the Chinese citizen to leave his cellphone inside his Sydney mansion while they stepped outside to talk.

The government argues that by helping Huang avoid Australian security surveillance, Dastyari had not put Australia's interests first. Dastyari has not denied the accusation, but said he did not know Huang was the target of a surveillance operation.

The Chinese statement said Australian media reports "reflected a typical anti-China hysteria and paranoid" and "tarnished Australia's reputation as a multicultural society."

"Some Australian politicians and government officials also made irresponsible remarks to the detriment of political mutual trust between China and Australia. We categorically reject these allegations," the statement said.

Unlike the U.S. and many other countries that ban foreign donations, Australian law has never distinguished between donors from Australia and overseas.

Former President Barak Obama's administration last year called for the Australian system to be reformed to remove the influence of political donations from China -- Australia's largest trading partner and its biggest source of foreign political funds.

Then-U.S. Ambassador John Berry said the U.S. was surprised by the amount of Chinese money and influence in Australian politics and wanted Australia to resolve its foreign donation issue.