The Chinese embassy in Canberra yesterday condemned in unusually blunt terms the xenophobic campaign underway against China’s interference in Australian politics. The remarks followed Prime Minister Malcolm Turnbull’s announcement on Tuesday of sweeping new legislation expanding treason and espionage laws and outlawing foreign interference and political donations.

An embassy statement accused the Australian media of repeatedly fabricating stories about so-called Chinese influence and infiltration. “Those reports, which were made up out of thin air and filled with Cold War mentality and ideological bias, reflected typical anti-China hysteria and paranoia,” it said.

The statement declared that the media reports made “unjustifiable accusations against the Chinese government” and “unscrupulously vilified Chinese students as well as the Chinese community in Australia with racial prejudice.”

These comments followed those of a Chinese foreign ministry spokesman in Beijing on Tuesday who urged “the relevant people in Australia to discard prejudices and speak and act more in a way that will be conducive to boosting the China-Australia relationship.”

The strong reaction clearly reflects growing concern in Beijing about the hostile atmosphere being whipped up in Australia towards China as Canberra aligns itself more and more closely with the US confrontational stance towards China and its military build-up in Asia.

The laws foreshadowed by the Turnbull government have not yet been tabled in parliament, but they go far beyond existing legislation in Australia and other parts of the world. The coverage of the issue in the British and American media is an indication that the anti-democratic legislation could become a new benchmark internationally.

A government media statement declared that the laws will introduce “offences that criminalise covert and deceptive activities of foreign actors that fall short of espionage but are intended to interfere with our democratic systems and processes or support the intelligence activities of a foreign government.”

Such extraordinarily vague terms as “covert and deceptive activities” and “foreign interference” leave the field wide open for Australian authorities to crack down on anyone or any organisation deemed to be lining up with China. The legislation will also require public registration for so-called “foreign agents”—that is, anyone acting on behalf of a foreign individual or entity.

After announcing the laws, Turnbull again lashed out at Senator Sam Dastyari saying he had “sold out” Australia. Dastyari’s “crimes” were to solicit donations from a Chinese-born businessman Huang Xiangmo, suggest in one meeting that he and Huang turn their phones off to prevent eavesdropping, and question Australian and US interference in China’s territorial disputes with its neighbours in the South China Sea.

Attorney General George Brandis made clear that such activities would be criminalised under the new legislation, which will include penalties up to life imprisonment.

The new laws are the culmination of a vicious anti-China witch-hunt for more than a year that has been fed by the Australian Security and Intelligence Organisation (ASIO) and other intelligence agencies and backed to the hilt by Washington. What passes for the liberal media in Australia—the Australian Broadcasting Corporation (ABC) and Fairfax Media—have been in the forefront of the campaign.

Former trade minister Andrew Robb, who has been under attack for accepting a well-paid position with the Chinese firm Landridge that manages the commercial port of Darwin, lashed out at his former colleagues in the ruling Liberal National Coalition. “The attempts to trash my reputation in some quarters—now aided and abetted by the government—are ill-informed and cheap politics.”

Asked if he was surprised if he might be forced to register as a “foreign agent,” Robb replied that he was not “after the way the ABC and Fairfax Media have beaten the crap out of these issues. There is at the present time, and has been for 12 months or more, an inordinate attempt to worry people about China.”

The former trade minister declared that the United States was the “biggest source of instability in the region” due to President Trump’s decision to pull out of the Trans-Pacific Partnership (TPP). Having sabotaged the TPP, Trump is adopting even more aggressive economic measures towards China that could provoke a trade war.

Former Labor foreign minister Bob Carr, who could also be required to register, has been under fire for criticising Australian support for the US hard-line stance against China and over Chinese funding of the Australia-China Relations Institute that he heads. Carr pointed to the hypocrisy of the anti-China campaign, noting that bodies such as the Australian Strategic Policy Institute and United States Study Centre express “consistently pro-American positions” and receive “funding from US corporations, including armaments companies.”

Corporate leaders are also anxious about the impact of the anti-China campaign on trade and possible economic retaliation by Beijing. Writing in today’s Australian, senior financial writer Glenda Korporaal commented that “there has been a growing concern [in business circles] whether increasingly heated political debate could harm hard-fought long-term business ties.”

Overwhelmingly, however, the media and political establishment, including the Labor opposition, have fallen into line with the draconian new legislation. Among commentators closely connected to the security and intelligence apparatus, there is note of triumph. Writing in the Australian Financial Review today, Rory Medcalf, head of the National Security College, declared that it was not surprising that “Australia is fundamentally updating its laws on foreign interference… What is surprising is that it has taken so long.”

Bitter divisions remain that stem from a fundamental dilemma confronting the ruling class which is caught between its longstanding strategic and economic reliance on the United States and its heavy dependence on China as its largest trading partner. In the past, governments have attempted to balance between Washington and Beijing, but, as US preparations for war against China have accelerated under Obama and now Trump, the room for manoeuvre has shrunk.

The feverish denunciations of figures like Robb, Carr and Dastyari, all of whom are supporters of the Australia-US military alliance, indicate that any deviation from the anti-China line will no longer be tolerated. Australia is being placed on a war footing and anyone who challenges the official propaganda, let alone opposes the US war drive, will be increasingly subject to media witch-hunting and serious criminal charges.