China Says `Cold War Mentality' Hurting Australia Ties Must End

(Bloomberg) -- China’s ambassador to Australia called for an end to a “Cold War mentality” that’s straining ties between the two nations, weeks after Beijing blamed its key trading partner for creating a diplomatic spat.

“The two countries need to have more interaction and inclusiveness, with less bias or bigotry,” Cheng Jingye said in a speech in Canberra on Tuesday. “We need to see each other’s development and policy intentions from a more positive perspective, with less Cold War mentality.”

The comments show lingering resentment in Beijing after Prime Minister Malcolm Turnbull in December said reports of Chinese meddling with media, universities and lawmakers were a catalyst for tougher laws against foreign interference. China’s Foreign Minister Wang Yi last month blamed Australia for creating the tensions, which some exporters say have caused their goods to be held up in Chinese ports.

The legislation, expected to be voted on in parliament this month, will ban foreign political donations and require people or organizations acting in the interests of overseas powers to register and disclose their ties.

“China never interferes with the internal affairs of other countries, let alone carry out so-called infiltration of other countries,” Cheng said, without mentioning the proposed new law.

Broken Relationship

His comments at the Australia China Business Council summit, due to be addressed by Turnbull later on Tuesday, came after the body’s president, John Brumby, called for the relationship to be repaired.

“To put it bluntly, the relationship needs reset and repair –- to return to a position of mutual trust, respect and friendship –- to the long-term benefit of both Australia and China,” said Brumby, a former premier of Victoria state. “The deterioration in the government-to-government relationship has the potential to undermine our business opportunities and future success.”

Brumby, also a director of the Australian unit of Huawei Technologies Co. -- China’s largest maker of telecommunications equipment -- rejected the notion that Australia will compromise its security if it deepens ties with China. Local media has reported Huawei will be barred from providing equipment for Australia’s next-generation wireless networks due to security concerns.

Squeezing Huawei

Australia announced last week it will help fund a new telecommunications cable stretching from Sydney to the Solomon Islands, squeezing out a bid by Huawei, as it tussles with China to retain its diplomatic influence in the South Pacific.

Australia Foreign Minister Julie Bishop said in an interview published in Fairfax newspapers on Tuesday that China’s push to fund infrastructure in Pacific island nations could compromise their sovereignty.

“We would like the Pacific to see Australia as providing them with the kind of support that maintains their sovereignty, maintains their economic stability and doesn’t become an unsustainable debt burden,” Bishop said in the interview. “That’s what Australia aims to provide and we encourage others to do the same, including China.”

She said that Australia wanted to ensure that Pacific nations weren’t burdened with unsustainable debt as “the trap can then be a debt-for-equity swap and they have lost their sovereignty.”

©2018 Bloomberg L.P.