BEIJING (Reuters) - Australian media reports on Chinese interference in Australia are racist and paranoid, China s top newspaper said on Monday, stepping up a war of words over concerns in Australia about Chinese influence in the country. Australian Prime Minister Malcolm Turnbull said last week he took reports very seriously that China s Communist Party had sought to interfere in his country. Turnbull said that foreign powers were making  unprecedented and increasingly sophisticated attempts to influence the political process  in Australia and the world. He cited  disturbing reports about Chinese influence . The Chinese government has already protested the remarks, and on Monday the ruling Communist Party s official People s Daily stepped up the attacks. The reports in Australian media have been full of imagination, making baseless attacks on the Chinese government and have maliciously slandered Chinese students and people living in Australia, the paper said in a commentary.  This type of hysterical paranoia had racist undertones, and is a stain on Australia s image as a multicultural society,  the People s Daily said. The commentary was published under the pen name  Zhong Sheng,  meaning  Voice of China,  which is often used to give the paper s view on foreign policy issues. China s soft power has come under renewed focus last week after a politician from Australia s opposition Labor party was demoted from government having been found to have warned a prominent Chinese business leader and Communist Party member that his phone was being tapped by intelligence authorities. In June, Fairfax Media and the Australian Broadcasting Corporation reported on a concerted campaign by China to  infiltrate  Australian politics to promote Chinese interests. Turnbull has vowed to ban foreign political donations to curb external influence in domestic politics. The People s Daily said that China had no intention of interfering in Australian politics or using financial contributions to curry influence. China is Australia s largest trading partner. The two countries have no historical enmity or conflicts over each others  basic interests and can absolutely forge good relations, it added. China  urges the Australian government and media to cast aside political prejudice and bigotry and stick to the principle of using the facts in handling issues of relations with China , the paper wrote. 