Huang Xiangmo, the Chinese businessman who paid a personal legal bill of Labor senator Sam Dastyari, has resigned as chair of the Australia-China Relations Institute (ACRI) at UTS over "coverage about political donations and supposed Chinese influence".

Mr Huang, the head of property developer Yuhu and a prolific political donor to both sides of politics, gave $1.8 million to set up the ACRI in 2014.

Headed by former foreign minister Bob Carr, ACRI has been criticised for taking an overly positive view of China and been subject to allegations that it has been too closely aligned with the propaganda aims of the Chinese government.

Mr Carr has frequently said ACRI takes "an unashamedly positive and optimistic" view of the bilateral relationship.