Bishop was in Argentina on the G20 sidelines, grabbing a moment with Wang because she had apparently been unable to secure high-level talks in Beijing for months. According to many observers, Australia was in the freezer, punished for outspoken comments made by Bishop last year on China’s behaviour in the South China Sea and for links drawn by Prime Minister Malcolm Turnbull between China and planned laws against foreign interference in Australian domestic politics. Sideline talks at big multilateral meetings are traditionally how minor powers address major ones when they are out of favour. Bishop made the best of it, telling media that the conversation had been "very warm and candid and constructive" and tweeting out a picture of the two ministers together. Bishop’s beam is warm as the West Australian sun, Wang’s face is arranged into something between a grimace and a glower.

Wang put out his own statement stressing that their talk was not a formal bilateral meeting and that he had conceded to take part at Australia's request. His statement noted that Bishop had accepted that tension between the nations was “due to the Australian side's reasons”. Australia, he said, needed to remove its “tinted glasses” when it came to the relationship. Loading Then on Thursday night ASIO chief Duncan Lewis told a Senate estimates hearing that foreign [read Chinese] espionage was being conducted in Australia at an unprecedented scale. "Espionage, interference, sabotage and malicious insider activities can inflict catastrophic harm on our country's interests," he said. “This is not a theoretical proposition. The reality is that acts of espionage and foreign interference are occurring against Australian interests, both in Australia and overseas." Surveying the carnage at the end of the week Clive Hamilton, the leading China hawk whose recent polemical book Silent Invasion about Chinese influence in Australia has added to tensions, said he was not surprised by Hastie’s revelations, nor by Wang’s terse words.

What shocked him, he told Fairfax Media, was how scattered Australia’s response to China has been. “This is just the start,” he said. “They haven’t even done anything to us yet, they have just cancelled a few meetings, we have fallen at the first hurdle.” Simmering tensions come to a boil Tensions between Australia and China might have been growing for months - or years - but it is no surprise that they surfaced so publicly over recent days, and to understand that you need to understand why Hastie decided to go public with his accusations about Chau Chak Wing. Loading

Hastie is the chairman of the bipartisan Senate security committee that is currently considering the foreign interference laws, and pressure is mounting on the government to have the laws passed before an election campaign that might politicise them. The committee appears to be divided. Hastie is a champion of the laws and appears to have the backing of Labor MP Anthony Byrne, but not shadow attorney-general Mark Dreyfus. It gets more complicated. Hastie received his information on Chau in a recent briefing with US intelligence officers. Since he spoke out he has dismissed the suggestion that he leaked classified US information, and the US has come forward to say it has no concerns about Hastie’s use of the material. This makes sense: the US wants to see Australia toughen its stance against China, and the passage of the foreign interference laws are the next key tussle in this long game. Hamilton believes it is even more crucial than that. After recent briefings in Washington, DC, with officials from the US intelligence community and officials from the State Department, he argues that Australia’s capacity to stand up to China is seen by the US as a test of the resilience of its diplomatic network in the region. America backs Australia’s China hawks.

The foreign interference laws also demonstrate what a fiendish domestic political problem the China relationship has become. In the face of China’s rise all the well-understood boundaries of interest, party and ideology in Australia collapse. Nationalists on the right find themselves at odds with the Coalition’s traditional friends in the business community, whose prime objective is easy access to the exploding Chinese market. Old fissures in the Labor Party between sceptics and champions of the US alliance have opened up. Or, some would say, have been ruthlessly exploited by China. Dr Chau Chak Wing has a building named after him on the UTS campus. Credit:Sahlan Hayes

Not even the university sector is immune. As much as 25 per cent of the student bodies of some Australian universities are made up of full-fee paying Chinese students, says Dr James Leibold, a China specialist at La Trobe University. Then there are geysers of donations flowing into universities. It is no accident that the man Hastie accused of bribery this week has one building named after him on the campus at the University of Technology, Sydney, and a museum in his name being constructed at the University of Sydney. Hamilton accuses free speech advocates in the university sector of falling silent about Chinese interference and human rights abuses in the face of a wall of Chinese money. So far the best-known political casualty of the China debate has been the rising NSW Labor senator Sam Dastyari, who quit parliament after it was revealed he had echoed Chinese Communist Party (CCP) positions on the South China Sea after accepting donations from CCP-connected businesses. Other leading Labor figures, including former prime minister Kevin Rudd and Bob Carr, the former foreign minister and NSW premier who now runs the Australia-China Relations Institute (ACRI) at UTS, are seen by China hawks as compromised, seduced either by CCP resources or propaganda. Leibold says that in recent months pro-China voices in Australia have been emboldened by the Turnbull government's abandonment of the hawkish tone it adopted on China last year.

These pro-China voices, Hamilton said this week, are - wittingly or not - serving Chinese interests. Fairfax Media understands that view is shared by American observers. Raby rejects this suggestion, saying he lamented that the debate had become so acrimonious. He says he has no problem with the foreign interference laws, nor with Australia standing up to China over matters of national interest or in defence of the current international rules-based order, or over democratic ideals. But he maintains the relationship has been mishandled, and that those laws could have been introduced without needlessly offending China. Chinese President Xi Jinping. Credit:AP In his recent column he argued that China was at the heart of a host of rapidly developing regional issues critical to Australia, illustrated in recent weeks by talks between Chinese President Xi Jinping and North Korea’s Kim Jong-un, as well as with the leaders of Japan and India. Australia’s voice had not been heard in those discussions, he argued, because the government was determined to impress the US by taking a harder line than other nations on the South China Sea.

Carr agrees. He wrote this week that Australia’s relationship with China is now arguably as bad as it has been since 1972, not because of issues of substance but because of a “flamboyant rhetorical shift” against China, presumably conducted “to impress the Trump administration with our impeccable alliance credentials”. In his opinion piece he said that claims that Chinese students in Australia were promoting Communist Party policy were baseless, and that in failing to defend the students Australia had missed an opportunity to help repair the relationship. And he noted that in failing to keep Coalition MPs from further traducing China, the Prime Minister had further tarnished the relationship. A Chinese base under construction on Mabini (Johnson) Reef, one of the disputed Spratly Islands in the South China Sea. He wrote: "You can’t say to the Chinese 'Oh, that’s only Barnaby [Joyce]' or '[Concetta] Fierravanti-Wells is only a junior minister'. It’s easy to imagine the nationalist outrage if senior Chinese leaders had directed such rhetoric at Australia. We wouldn’t accept comparable insults from any international partner. In foreign relations words are bullets." After Wang released his tepid statement on his talk with Bishop in Argentina, a Chinese English-language tabloid called the Global Times wrote a damning editorial about the episode and Australia’s conduct.

The Global Times is not a mouthpiece for the CCP, says Leibold, but notes it is telling how well the paper understood the complicated pressure points in the Australian debate. It noted that since the start of the year Australia had sought to “soothe” China, but declared that it was “necessary for China to leave Australia hanging for a while”. It even argued that China could cut Australian imports while increasing America's. "$6.45 billion would send cold chills up and down the spine of Australia," the editorial stated. "Of course, it would be an even greater shock if the import reductions totalled $10 billion.” It suggested there was “no need” for the Australian Prime Minister to visit China in the foreseeable future. On Friday Turnbull reiterated his support for the foreign interference laws, telling reporters on the Central Coast: "My job is to stand up for Australian democracy and ensure that it is not interfered with. If there are foreign interests or governments or political parties that wish to have a voice, then they should do so openly and transparently."

He did not mention China.