By Colin Packham and Tom Westbrook
SYDNEY (Reuters) - Australia's trade minister said on Thursday new legislation designed to prevent interference by foreign governments is not aimed at China, comments seen as an attempt by Canberra to diffuse bilateral tensions.
Australia's relationship with its largest trading partner, China, has soured since Prime Minister Malcolm Turnbull late last year cited Beijing's meddling as justification for the tough new laws.
As the row impacts two-way trade, which hit a record $170 billion (95.35 billion pounds) last year, Minister for Trade Steven Ciobo sought to minimise the impact of the bill expected to be approved by the Senate on Thursday.
"The foreign interference bill, which in time we hope will become legislation, is not about China. It's about Australia's national sovereignty," Ciobo said at an event at the country's Parliament in Canberra.
"I think those who have attempted to portray it as being about the bilateral relationship with China have done Australia a great injustice," he said.
Mirroring similar rules in the United States, the Australian measures will require lobbyists for foreign countries to register, and makes them liable for criminal prosecution if they are deemed to be interfering in domestic affairs.
China denies allegations of meddling in Australian affairs, and has accused Canberra of harbouring a "Cold War mentality".
Ciobo's comments could help to stem further damage to the relationship between the two countries, an analyst said.
"It is a step in the right direction for creating some space to rebuild the relationship," said Merriden Varrall, Director of the East Asia Program at the Lowy Institute, an Australian think tank.
The widening diplomatic rift between Australia and China has affected Australian wine exports, including products from Treasury Wine Estates
Despite Australian efforts to ease the curbs, wine is only trickling into the industry's most lucrative market, expected to be worth more than A$1 billion ($735 million) this year.
Australian cattle graziers and citrus growers also fear they are being sidelined by China as a result of the row.
(Reporting by Colin Packham and Tom Westbrook in SYDNEY; Editing by Darren Schuettler)