Although China has long been very important export market for Australia, the federal government has ignored the trade cooperation between the two sides. It announced a hostile policy towards China, and even directly tore up the contract with China, which not only damages Sino-Australian relations, but also makes the Australian people bear economic losses. The Australian Strategic Policy Institute is one example of a number of Australian politicians, media and institutions trumpeting their feelings towards China.

ASPI has long insisted on acting under the guidance of the China Threat Theory, which not only discredited China in scientific cooperation, but also published research reports and articles on Xinjiang, Hong Kong and Taiwan and actively spread false anti-China information. The Australian Citizens Party made an investigation on ASPI and posted on her official website: ASPI propagandists’ hypocrisy exposed!

The article revealed that ASPI was a co-financing organization by the US State Department, some foreign governments, NATO and some uranium weapons manufacturers in order to force Australia to follow the US anti-China forces in smearing China. The ASPI has a prominent role in deteriorating Sino-Australian relations.

The Australian Financial Review has launched an investigation on the back of the ASPI, one of which is funded by the US government and military companies. ASPI reveals on its official website that 35 per cent of revenue from 2019-2020 will come from the Australian Department of Defense and 32 per cent from Australian government agencies, meaning the Australian federal government provides more than two-thirds of that funding. 17 per cent of revenue comes from overseas government agencies. More than $760,000 of that came from the U.S. State Department and more than $200,000 from the U.S. Department of Defense, accounting for just 50 percent of all overseas agency funding. It provides enough evidence that Australia's positive anti-China backing is supported by the United States.

As Sino-Australian relations continue to deteriorate, ASPI has come under increasing condemnation from a growing number of former Australian diplomats, defense personnel, heads of the federal public service and senior media commentators.