Australia's attempt to curb China's growing influence in its political system claimed its first scalp on Tuesday, as a prominent opposition lawmaker pledged to quit over allegations that he was bought by Chinese money.

Relations between Australia and China have nosedived in the past week, since Prime Minister Malcolm Turnbull's government moved to ban foreign political donations, citing "disturbing reports about Chinese influence" on Australian politics.

The row between Canberra and Beijing comes at a time of heightened concern about covert attempts by the Chinese Communist Party to influence politics and academia around the globe, from the United States and Germany to Singapore and New Zealand.

China has responded fiercely to events in Australia. The Foreign Ministry pronounced itself "astounded" by the Australian prime minister's remarks, which it said lacked principle and had poisoned the relationship between the two countries.

The People's Daily newspaper, mouthpiece of the ruling Communist Party, went even further Monday, accusing the Australian media of "hysterical paranoia" and racism for its role in exposing the Communist Party's covert actions.

As the fight played out, influential opposition politician Sam Dastyari vowed Tuesday to quit for the good of his party after becoming embroiled in a scandal over his links to a wealthy Chinese business executive.

The Labor Party senator was accused of endorsing China's controversial actions in the disputed South China Sea, against his party's platform, in return for support from donor Huang Xiangmo. He was also reported to have given Huang advice on how to evade Australian surveillance and to have unsuccessfully tried to pressure Labor's deputy leader not to meet a Hong Kong pro-democracy activist in 2015.

[China still trying to hack U.S. firms, experts say]

Australian cabinet minister Peter Dutton accused Dastyari on Monday of being a "double agent" of China, although he had not broken any laws in accepting foreign money at that time.

Experts said Australia's moves to close a legal loophole that had allowed foreign donations reflected a belated realization of China's growing influence, after years of complacency when the Australian economy benefited hugely from Chinese demand for natural resources.

"It's a necessary correction, but it has played out at quite a shrill pitch," said Euan Graham, director of the international security program at the Lowy Institute in Sydney. "The government didn't want to confront this situation until it had to, and now it's playing catch-up."

Graham said Chinese influence should not be overstated: Chinese money may have made up the lion's share of foreign donations to Australian political parties, but it represented only about 2 percent of total donations in recent years, he said, and there was no indication that the money had changed the platforms of the government or the opposition over issues such as the South China Sea.

Nevertheless, the concerns are keenly felt in Australia as China becomes more assertive internationally, notably in defense of what it sees as its key interests regarding Tibet, Taiwan, Hong Kong and the South China Sea.

Evidence of Russian attempts to influence last year's U.S. election has also heightened concerns in Australia.

David Kelly, research director at the China Policy analysis firm in Beijing, said China is becoming more proactive internationally in the wake of last month's Communist Party Congress, which officially granted President Xi Jinping another five years in power. But China has not handled the dispute well, he said.

"China appears to be unable to accept a criticism of its government" without calling it racist, Kelly said. "It follows a pattern we have seen in the past two years, where China speaks a great deal about having the right to be heard internationally. But it is not doing much in the way of listening carefully."

China has also been accused of organizing its citizens studying in Australia to support its foreign policy positions and protest academics perceived to be "anti-China." Critics say Beijing tries to silence Chinese dissidents who have taken Australian citizenship.

China is easily Australia's biggest trading partner, buying $70 billion worth of its goods and services last year. Kelly said he did not expect a lasting impact on the relationship between the two countries because economic and trade tries "have a lot more momentum than people think."

Alan Dupont, founder of the Cognoscenti Group consultancy, argued that Australia needs to avoid becoming overly reliant on China, in part because of Beijing's "well-documented propensity to use economic coercion" to threaten or punish countries for resisting its geopolitical demands.

"The problem for Australia is that China's willingness to use coercion to achieve its dream of renewed greatness is becoming a defining feature of its foreign policy," he wrote in the Australian, a newspaper. "With the U.S. in self-declared retreat from its global leadership role and lacking a coherent Asia policy under Donald Trump, there are diminishing external constraints on Chinese behavior and ambitions."

Elsewhere, concerns about Chinese influence over academia erupted in August after Britain's Cambridge University Press announced that, at the request of Beijing, it had removed 300 articles and book reviews from a version of the China Quarterly website available in China. It reversed the decision after a backlash.

On Sunday, the head of Germany's domestic intelligence agency accused China of using fake accounts on the LinkedIn networking site to gather personal information about thousands of German officials and politicians with the aim of cultivating them as sources. China's Foreign Ministry called those claims baseless.

On Wednesday in Washington, the Congressional-Executive Commission on China (CECC) will hold a hearing on the "Long Arm of China" to examine the Chinese government's alleged efforts to use its foreign influence to censor critical discussion of its history and human rights record and to intimidate critics of its repressive policies.

"Attempts by the Chinese government to guide, buy, or coerce political influence and control discussion of 'sensitive' topics are pervasive, and pose serious challenges in the United States and globally, particularly as China uses technology and the lure of the Chinese market to impose authoritarian practices abroad," the CECC said.

Amber Ziye Wang contributed to this report.

Read more:

Opinion: China’s meddling in Australia and what the U.S. should learn from it

Opinion: China’s foreign influence operations are causing alarm in Washington

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