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Chinese Foreign Ministry spokesman Hong Hei said diplomatic missions must “refrain from activities not in line with their duties”.
Beijing urged Australia to abide by the Vienna Convention on Diplomatic Relations and the Vienna Convention on Consular Relations.
China and Australia had a consensus to increase cooperation, and both viewed the other as a development opportunity, the ministry spokesperson urged on Monday.
“China-Australia relations are facing an important opportunity, as China’s development has created vast opportunities for Australia,” said Hong.
Media reports alleged that Australia took part in a vast American surveillance network that spied on many countries in the Asia-Pacific, including China.
The Sydney Morning Herald reported last week that the intelligence collection takes place in Australian embassies across Asia, as well as other diplomatic missions, reportedly without the knowledge of Australian diplomats.
Beijing and Canberra are currently negotiating a free-trade agreement, nine rounds of free trade talks have already been held since 2005.
Australia’s new Prime Minister Tony Abbott has set a deadline of 12 months to put in place the crucial FTA with China.
China is the largest importer of Australian goods. Bilateral trade between the two countries stood at $122.3 billion in 2012.