Senior Australian politician resigns over China ties scandal

  • A big name Australian opposition lawmaker has resigned over a scandal concerning his ties to China
  • Dastyari's resignation is the latest in an ongoing spat between China and Australia concerning the former's rumored attempts to buy political leverage Down Under
  • Last week, Australian Prime Minister Malcolm Turnbull announced new measures to restrict overseas interference in domestic politics, including a ban on foreign donations
Australian politician Sam Dastyari makes a public apology in Sydney on September 6, 2016, after asking a company with links to the Chinese government to pay a $1,273 bill incurred by his office.
William West | AFP | Getty Images
Australian politician Sam Dastyari makes a public apology in Sydney on September 6, 2016, after asking a company with links to the Chinese government to pay a $1,273 bill incurred by his office.

A big name Australian opposition lawmaker has resigned from parliament over a scandal concerning his ties to China.

Sam Dastyari, of the center-left Labor Party, handed in his notice on Tuesday.

"Today, after much reflection, I've decided that the best service I can render to the federal parliamentary Labor Party is to not return to the Senate in 2018," he told journalists in Sydney, Reuters reported.

Dastyari's resignation is the latest in an ongoing spat between China and Australia concerning the former's rumored attempts to buy political leverage Down Under.

Dastyari has been repeatedly linked to China. He stepped down from senior duties in late November over comments he made — not in line with his party — that defended China's position in the South China Sea territorial dispute.

Dastyari was also reported to have tipped off Chinese businessman and political donor Huang Xiangmo that Australian intelligence authorities were likely monitoring his phone.

Dastyari has denied wrongdoing over both matters.

China bites back

Chinese state run newspaper People's Daily published an op-ed Monday that chided "unprincipled Australian politicians" who were "full of prejudice against China" and had "poisoned the atmosphere between the two countries."

"China always follows the important principle of mutual respect and non-interference in each other's internal affairs when developing relations with other countries," it said, adding that "Australia is actually looking for an imaginary enemy for no reason."

Last week, Australian Prime Minister Malcolm Turnbull announced new measures to restrict overseas interference in domestic politics, including a ban on foreign donations.

Turnbull cited "disturbing reports about Chinese influence" in an address to reporters Wednesday, though clarified that his reforms were "not about any one country."

Chinese President Xi Jinping (right) shakes hands with Australian Prime Minister Malcolm Turnbull at the G20 Summit in Hangzhou, China, on September 4, 2016.
Lintao Zhang | Getty Images
Chinese President Xi Jinping (right) shakes hands with Australian Prime Minister Malcolm Turnbull at the G20 Summit in Hangzhou, China, on September 4, 2016.

Beijing has since filed a complaint with Canberra, while the Chinese embassy in Australia also posted a retaliatory statement.

According to Reuters, China is Australia's biggest trade partner, buying A$93 billion ($70 billion) of goods and services in 2016.

But, Australia is a member of the Five Eyes intelligence alliance alongside the U.S., the U.K., Canada and New Zealand.

"Concerns about Chinese influence in Australia aren't new, but they are certainly more front and center now than ever before," Ely Ratner, senior fellow for China studies at the Washington D.C.-based thinktank Council on Foreign Relations, told CNBC.

Ratner said that Turnbull had "responded swiftly and responsibly," adding that "Canberra's reaction will build confidence in Washington that its close ally is taking the China challenge more seriously than ever."