China has cancelled a high-level diplomatic visit to Australia as relations sour over Beijing's arrest of an Australian mining executive and Canberra's granting of a visa to an exiled Uighur leader.
Beijing cancelled a visit by Vice-Minister for Foreign Affairs He Yafei over the granting of a visa for Uighur leader Rebiya Kadeer, blamed by China for instigating last month's ethnic riots in Xinjiang province, Australia's government said.
"We regret that the Chinese government has felt obliged to take these steps, since the government's position on the Xinjiang Uighur Autonomous Region is clear," a spokeswoman for Australian Foreign Minister Stephen Smith told Reuters on Tuesday.
Chinese prosecutors earlier this month arrested four employees of Anglo-Australian mining giant Rio Tinto, including Australian Stern Hu and three Chinese staff, on suspicion of obtaining commercial secrets and bribery.
The arrests and a warning from Australia's Mandarin-speaking Prime Minister Kevin Rudd that the world was watching China's handling of the case have clouded two-way trade worth $53 billion between Australia and its biggest export partner.
He Yafei, whom Smith met recently in Egypt to discuss the detention of Hu, had planned to attend the Pacific Islands Forum (PIF) meeting in Cairns, Australia, earlier this month, but was replaced by lower-ranked Pacific envoy Wang Yongqiu.
"It has been led at vice-minister or assistant minister level at previous PIF meetings," Smith's spokeswoman said, acknowledging the rebuff.
He had been due also in Canberra for talks with senior officials including Foreign Ministry Secretary Michael L'Estrange, but cancelled that meeting, she said.
The Chinese had hinted they would not cooperate with Rudd's plan to push for an Asia-Pacific community of nations, the Australian newspaper said, without saying where it got the information.
Smith's office said centre-left government remained "committed to a mutually beneficial long-term partnership with China", with both sides in recent weeks having stepped away from public criticism of one another to try and lower tensions.
China also downgraded charges against Hu from a previously levelled accusation of stealing state secrets.
Rudd's Special Minister of State and Cabinet Secretary, Joe Ludwig, told parliament last week the Kadeer visa did not mean Australia backed Uighur self-determination, but rather that the government had no evidence of Beijing's accusations against her.
"It was a private visit," Ludwig said. "Successive Australian governments have consistently adhered to a 'one China' policy. We recognise China's sovereignty over the Xinjiang Uygur Autonomous Region and China's territorial integrity."