“Australia has picked sides and embraced the US and Japan, but in the meantime, it keeps racking up economic profits from China.”

Palmer, head of the Palmer United Party (PUP) and an Australian member of parliament, sparked controversy on Monday with comments made live on the Australian Broadcasting Corporation’s Q&A programme.

"I don’t mind standing up against the Chinese bastards and stopping them from doing it," Palmer said. "I’m saying that because they’re communist, because they shoot their own people, they haven’t got a justice system and they want to take over this country. We’re not going to let them do it."

Palmer’s party’s three Senate seats currently hold the balance of power in Australia’s upper house of parliament.

The newspaper, which often carries strongly-worded patriotic editorials, suggested that China should bar Palmer and senior executives of his companies from visiting the country. Sanctions should also apply to “any Australian companies which have business dealings with Palmer.”

Australia’s ties with China reached a new low after Canberra criticised Beijing for setting up an air defence identification zone in the East China Sea over waters also claimed by Japan last year.

Australian Prime Minister Tony Abbott on Wednesday slammed Palmer’s anti-China tirade as “wrong” and “deeply regrettable”.

“Certainly Mr Palmer’s outburst on ABC TV the other night was just over the top, shrill and wrong,” Abbott told Fairfax radio in Brisbane. “I think it’s deeply regrettable.

“I think the Chinese appreciate Australia enough to understand that Mr Palmer just speaks for himself on an issue like this, and he certainly isn’t speaking for Australia.”

The Chinese embassy in Canberra reacted on Tuesday by saying Palmer’s remarks were “full of ignorance and prejudice”, but its statement did not mention any steps the Chinese government would take in response. Australia’s Foreign Minister Julie Bishop also rushed to condemn Palmer for his remarks.

The mining tycoon wrote in a tweet on Tuesday that his comments were not intended to refer to Chinese people but instead to one company, “which is taking Australian resources [and] not paying.”

On Wednesday, Palmer stood by his remarks but sought to clarify them by saying, “I called the people that we’re dealing with in our company ‘bastards’ ... We’re not talking about Chinese people, we’re talking about the Chinese communist government who are suppressing their people.”

“I feel for the Chinese people who live under such tyranny,” he added.

PUP senator Jacqui Lambie added fuel to the fire on Tuesday by raising the prospect of a Chinese military invasion and saying Australia needs to look into anti-missile defence systems.

Commenting on that on Wednesday, Abbott said, “We all want a strong, an effective defence, but nevertheless China is our friend, not our enemy,” and added that Australia needs a “really strong relationship with China [and] luckily we have one.”

Noting that free-trade agreement negotiations with China are accelerating, the prime minister said, “If we can pull that off, that’ll be very, very good for Australia.”

Palmer is in a dispute with Citic, the Chinese state-owned conglomerate, over a joint mining project in Western Australia. The row, which first erupted over pricing adjustments, broadened when Citic criticised Palmer’s handling of the mining project’s port facilities. Citic has sued Palmer, claiming the businessman fraudulently channeled AU$10 million (HK$72.11 million) of its funds into his party’s political campaigns.

In the interview on Monday, Palmer again rejected Citic’s accusations. A spokesman for Citic Pacific Mining, the Citic subsidiary in Australia, declined to comment on Wednesday.

Additional reporting by Kyodo