Tensions between China and Australia may escalate further, diplomatic observers have warned, after the Australian defence minister said conflict with Beijing over Taiwan should not be discounted and suggested a Chinese port lease could be terminated. “It is hoped that the Australian side will fully recognise the high sensitivity of the Taiwan issue, abide by the one-China principle, be prudent in words and deeds, refrain from sending any false signals to the separatist forces of ‘Taiwan independence’, and do more things to benefit the peace and stability of the Taiwan Strait and Sino-Australian relations,” Wang Wenbin, a Chinese foreign ministry spokesman, said on Monday. On Sunday Defence Minister Peter Dutton told the Australian Broadcasting Corporation that conflict with Beijing over Taiwan “should not be discounted”. He added that while the Australian armed forces maintained high levels of preparedness to meet any threats to its allies, Canberra would work to try to maintain peace. Diplomatic observers in China warned that such comments might further damage relations between the two countries after the federal government cancelled deals the state of Victoria had signed with Beijing. Why does mainland China keep sending planes into Taiwan’s air defence zone? “The defence minister made such remarks at this time just to create an atmosphere in international public opinion,” said Yu Nanping, a professor of international relations with East China Normal University. “It does not mean that Australia really wants to intervene in Taiwan Strait affairs, nor does it have the ability and strength to intervene, nor does it have the qualifications.” The People’s Liberation Army has stepped up its activities around Taiwan in recent months. US Secretary of State Antony Blinken said earlier this month that the United States was concerned about aggressive actions against Taiwan and warned it would be a “serious mistake” for anyone to try to change the status quo in the Western Pacific by force. In a joint statement by US President Joe Biden and Japanese Prime Minister Yoshihide Suga, the two leaders made the first explicit reference to “peace and stability in Taiwan Strait” for over 50 years. “Australia just wants to show that it firmly stands with the US, as it relies heavily on US protection … China will not react too much to his remarks, as Australia is not capable of really intervening in the Taiwan Strait issue,” Ding Yifan, former deputy director of the Institute of World Development at the State Council’s Development Research Centre, said. In recent years, relations between China and Australia have been deteriorating after Huawei Technologies was banned from the country’s 5G network and Canberra called for an international inquiry into the origins of Covid-19. Dutton was also asked about the lease on the port of Darwin , and replied: “There are literally thousands of these cases to look at and the foreign affairs minister is working through all of that. “I am not pre-empting or suggesting that she’s looking at it. I think it is a question for Marise [Payne] to look at these individual cases. If it is not in our national interests then obviously she will act.” The Northern Territory government signed a 99-year lease with the Chinese-owned company Landbridge in 2015, prompting warnings the agreement could undermine Australia’s security. Regarding the port, Wang, from the Chinese foreign ministry, said: “It is hoped that the Australian side will treat China-Australia cooperation objectively and rationally and stop interfering with normal exchanges and cooperation between the two countries.” How next-generation technology could allow US to fight off mainland Chinese invasion of Taiwan Ding said: “It is likely that Australia will tear up the lease of Darwin port, because Australia often conducts military operations with the US military there. Against the background of Sino-US conflict, Australia may worry that commercial cooperation with China there will affect military cooperation with the US. “But from the perspective of commercial activities, if Australia breaks the contract, it needs to pay indemnities to China.” Additional reporting by Jun Mai