Under a proposed new law, Victoria's Belt and Road Initiative deal with China could be torn up by the foreign minister if it is deemed a threat to national security.

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The Global Times newspaper said Australia will become 'poor white trash'

The phrase was first said about Australia by the Singaporean PM back in 1980

Article was a response to PM's plan to stop states signing deals with China

The Global Times, regarded as a mouthpiece for the communist government, said in an editorial that Australia could become impoverished unless it welcomes Chinese investment.

The provocative article was a response to Prime Minster Scott Morrison's plan to stop states signing deals with foreign powers that go against Australia's foreign policy.

Investors from the United States and the United Kingdom put the most money into Australia, with China in ninth place.

Victoria made a deal with China under the country's Belt and Road Initiative, a scheme that sees the communist superpower invest in huge infrastructure projects around the world, in October 2018.

Premier Andrews said he made the agreement to increase Chinese participation in Victorian building projects, manufacturing and trade in order to boost jobs.

Several federal politicians, fearing the expansion of Chinese power and influence, have urged the Victorian government to scrap the deal but it has refused.

Under the proposed new law, the foreign minister will be able to terminate the deal and any private contracts that are part of it.

Once the law is in place, governments and universities will have six months to reveal their foreign deals to the foreign minister, who will then decide which ones must be stopped.

Beijing and Canberra have been at loggerheads after Australia led global calls for an inquiry into the origins of Covid-19.

Soon afterwards, China slapped an 80 per cent tariff on Australian barley, suspended beef imports and told students and tourists not to travel Down Under in an apparent attempt to damage the Australian economy.

On Tuesday Treasurer Josh Frydenberg blocked a $600million bid by Chinese company Mengniu Dairy to buy Aussie drinks company Lion, citing national security concerns.