As the western world’s first Mandarin-speaking head of government, Kevin Rudd seemed suited to the task of modernising Australia’s relations with China when he came to power in 2007.

But as Canberra ponders a decision on whether to allow a $19.5bn (€15bn, £13.5bn) investment by Chinalco, the Chinese metals producer, in Rio Tinto, the debt-laden mining group, the prime minister’s sinophilia is emerging as a potential political liability.

Chinalco’s gambit – the biggest overseas investment yet announced by a Chinese group – has attracted scathing opposition from nationalists, who have historically been suspicious of Chinese involvement in Australia.

One of the most graphic examples of the surge of anti-Chinese rhetoric sweeping Australia comes from Barnaby Joyce, leader of the opposition National party in Australia’s upper house. He tells viewers in a privately-funded television advertisement entitled “Keep Australia Australian” that the country’s “source of wealth” is being bought by a foreign government.

“The Australian government would never be allowed to buy a mine in China, so why would we allow the Chinese to buy and control a key strategic asset in Australia,” says Mr Joyce.

The backlash has been fuelled by a series of blunders by Mr Rudd and his Labor ministerial colleagues, including revelations of a secret meeting in Canberra between the prime minister and Li Changchun, a member of the Chinese Communist party’s supreme politburo standing committee.

Mr Rudd’s calls for China to have a greater role in the International Monetary Fund – a view that resonates in many other western countries – also created unwelcome attention as Malcolm Turnbull, the official opposition leader, accused the prime minister of not putting Australia’s national interest first.

“He’s not a roving ambassador for the People’s Republic of China. He’s the prime minister of Australia,” Mr Turnbull said.

The government claims that the criticisms are racist and intended to whip up fear about a non-existent “yellow peril”. However, although Canberra has cultivated China, dating back to Gough Whitlam’s Labor government in the early 1970s, Australia has not always had strong relations with Beijing. David Goodman, professor of Chinese politics at Sydney University, says that the logic of Australia’s federation at the turn of the 20th century was in-part based on anti-Chinese sentiment. “The first piece of legislation by the new federation was the white Australia policy,” which severely restricted Asian immigration, Prof Goodman says.

In opinion polls Mr Rudd’s popularity has been barely dented by the Chinese controversy. Mr Turnbull’s approval has fallen.

To Mr Rudd’s embarrassment, however, the issue runs the risk of becoming a defining element of the image of his Labor government, which faces a general election next year.

“Rudd has tied himself up unnecessarily by seeking to minimise the optics of his relationship with China,” says a senior Canberra lobbyist.

Copyright The Financial Times Limited 2018. All rights reserved.

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