It was a rebuff to China's ambitions, and it stung

China protested by cancelling a ministerial visit to Australia. Smith added: I vaguely remember the Leader of the Opposition saying to the Government some time ago that we should stand up to China. We did on the Rebiya Kadeer issue. It was a clear message to China - we will not allow you to veto our sovereign right to set immigration policy. Smith also gave a spirited defence of the principle of freedom of speech. The chicken has decided to put up a fight. Senior officials in the Australian Government believe that Beijing has four principal grievances against Australia at the moment. First was Rudd's speech on Tibet. Second was the collapse of the bid by China's state-owned Chinalco to buy a bigger stake in Rio Tinto. It was a rebuff to China's ambitions, and it stung. Stern Hu was duly arrested. Since then, Beijing has downgraded the charge against him from stealing state secrets to stealing trade secrets. That reduces the potential punishment from the death penalty to a seven-year jail term. But the vengeful anger smoulders still. Third was Australia's defence white paper, which nominated China as potentially the biggest source of instability in the Asia-Pacific. Fourth was the visa for Rebiya Kadeer. Taken together, it's enough for Chinese state-controlled media to denounce the sinophobic government of Kevin Rudd, as it did this week. Yet despite the rage in Beijing, the economic relationship Rosetta Stone Spanish (Latin) is thriving, utterly untouched by the diplomatic storm. This week's gas deal was stunning. China invited the Resources Minister, Martin Ferguson, for the ceremonial signing of the biggest business deal in Australian history, the $50 billion, -year deal to buy liquefied natural gas from the Gorgon field. Ferguson also met a senior Chinese minister, Zhang Ping, chairman of the National Development and Reform Commission. At the same time, China's Commerce Minister, Chen Deming, has agreed to a new round of negotiations for a free trade agreement with Australia. In talks with the Trade Minister, Simon Crean, Chen even proposed a new formula for making progress in the stalled talks. This is Australia's leverage. For China's successful rise it needs ever-growing quantities of food and fuel in a world that will be increasingly short of both. The chicken has a sharp beak and strong claws. The Rudd policy of business plus values is drawing a lot of noise from Beijing but no real price. Not yet, at least. The next big test will be the Dalai Lama's proposed visit to Australia in November. As for Wei Jingsheng, asked whether he planned to meet Rudd during his visit to Australia, he said: I am close to Kevin Rudd, but given his position now I will not make trouble for him. The Dalai Lama will make trouble enough. Wei laughed: The Dalai Lama and Rebiya Kadeer are good friends of mine. We take it in turns to visit to make trouble. The fox will not be amused. More tests lie ahead. Peter Hartcher is the Herald's international editor.

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