(Updates with Palmer losing another legal fight against CITIC)
BEIJING/SYDNEY Aug 20 An influential Chinese newspaper called for retaliation against Australia on Wednesday after Australian mining mogul and politician Clive Palmer described China's government as "bastards" who shoot their own people.
The Australian government has rebuked Palmer for his comments, and Foreign Minister Julie Bishop said she planned to contact the Chinese embassy to stress that the Australian parliament does not share Palmer's "abusive" views.
While the Chinese government has yet to publicly comment, a prominent Chinese newspaper, the state-run Global Times tabloid, weighed into the controversy, saying Australia should be taught a lesson.
"China cannot let him off, or show petty kindness just because the Australian government has condemned him," the newspaper said in an editorial in its Chinese and English editions.
"China must be aware that Palmer's rampant rascality serves as a symbol that Australian society has an unfriendly attitude toward China."
The Global Times is published by the ruling Communist Party's official People's Daily, and though it does not have the same mouthpiece function of its mother publication, its words can carry weight in government circles.
However, the government-run Xinhua news agency took a softer line, saying in a commentary that "one rotten apple" should not be allowed to ruin relations, noting that the Chinese embassy had received emails of support from Australian people who felt embarrassed by Palmer.
Palmer, who holds the balance of power in the Australian parliament's upper house, is locked in a legal battle with Chinese firm CITIC Pacific Ltd over cost blowouts and disputed royalty payments at the Sino Iron project in Western Australia, China's biggest offshore mining investment.
The outspoken businessman lost two parts of that legal fight on Wednesday. The Federal Court of Australia ruled that the government was wrong to have appointed Palmer's private company Mineralogy Pty Ltd as operator of Cape Preston port, where Sino Iron is exporting its ore.
In a separate case, a federal judge ruled that the government had the right to approve CITIC Pacific's security plan for the port facilities at Cape Preston.
Mineralogy had challenged the approval in an attempt to block CITIC Pacific, controlled by state-owned CITIC Group Corp , from exporting iron ore from the $8 billion project. CITIC bought the rights to the ore from Palmer and began shipments last December, more than three years behind schedule at nearly quadruple the original cost.
A further court challenge over some A$200 million ($185 million) in royalties is going on.
'RANTING AND RAVING'
Palmer has already said his comments were not intended to refer to the Chinese people, and on Wednesday issued another statement saying he had been a "major supporter of the Chinese" for a long time.
"What is unacceptable is a Chinese state-owned enterprise that abuses the legal system for commercial gain in a global strategic effort to control resources," Palmer said.
China is Australia's biggest trade partner with two-way trade approaching $150 billion, representing more than 20 percent of Australia's total trade.
Nev Power, chief executive of Fortescue Metals Group Ltd , which sold $11.8 billion worth of Australian iron ore to China in fiscal 2014, said he did not think the remarks would have an impact on bilateral relations.
"Clearly, they are not helpful comments. It sounded like a bit of ranting and raving. I'm sure that the Chinese will dismiss them for what they are," he told reporters.
But the Global Times said China should consider putting sanctions on Palmer and his companies and banning him and his senior executives from China.
"China must let those prancing provocateurs know how much of a price they pay when they deliberately rile us," it said, adding that Australia "must be marginalized in China's global strategy".
The newspaper implied that Australia did not mean that much to China in any case.
"Australia is a remote business partner, and a place where the Chinese can take a trip and learn some English." (1 US dollar = 1.0771 Australian dollar) (Reporting by Ben Blanchard in BEIJING, Jane Wardell in SYDNEY and Sonali Paul in MELBOURNE; Editing by Robert Birsel)