Malcolm Turnbull is very, very upset, and not just by the opinion polls indicating that voters want him for Prime Minister like they want a Hell’s Angel for a neighbour.

No, he’s not interested in the polls, he’s concentrating on jobs and the economy. Well, that’s what he’s concentrating on deep down. What he’s actually talking about up front is the Chinese connection with Kevin Rudd’s government.

This does not mean he is trying to revive memories of Reds under the Bed or the Yellow Peril, let alone to combine them into a present day Orange Menace — any such suggestion is contemptible. No, it’s a matter of the national interest that Rudd had a meeting with a Chinese official which the Chinese media knew about but the Australian media didn’t, and that Defence Minister Joel Fitzgibbon had two trips to China paid for by his friend Helen Liu and forgot to declare them on his parliamentary register.

To the normal mind all this proves is that Fitzgibbon was a bit sloppy (Tony Abbott’s term) in his accounting. The Minister has rightly been reprimanded and is now on a warning, which is as it should be; in spite of what Abbott claims, his offence was never a hanging one, even in John Howard’s first term when he actually dismissed junior (not senior) ministers for breaches of his code of conduct — later, of course, Howard abandoned standards altogether.

And Rudd’s desire for occasional confidentiality may annoy the press gallery, but given their collective reaction to the current hiccup in a hurricane, who can blame him? Sections of the media have tried to turn Liu into some kind of Mata Hari figure, a sinister if inscrutable Oriental infiltrating the very heart of the Australian government.

The fact that she was also photographed with John Howard is only further proof. And Rudd says he can’t even remember meeting her — was she in some kind of fiendish disguise? These are questions that must be answered. Well, they certainly must be asked, according to the rules of the Australian media, which sees a good spy story as only slightly less jeans-creaming than a good leadership story.

In the conspiratorial forefront, as always, was The Australian’s foreign editor Greg Sheridan, who sees Rudd as being drawn inexorably into Beijing’s sphere of influence. Our Prime Minister may not have become Australia’s Manchurian candidate — at least not yet. But his increasing willingness to act as an a advocate for the People’s Republic is a cause for alarm, and not only in Australia. Sheridan has his sources. He knows.

Well, he certainly knows about free trips, being an Olympic standard junketeer, and can claim to be something of an expert on agents of influence; during the previous administration of George W Bush, Washington regarded him as an asset second only to John Howard himself and spent quite a lot in money and resources duchessing him in the role. Perhaps he is projecting his own experience onto Rudd.

Or perhaps it is simply Murdoch Press paranoia; after all it was Sheridan’s own editor-in-chief, Chris Mitchell, who originally outed the mild mannered Manning Clark as a Soviet agent. Next week: Julia Gillard is the secret mistress of Kim Jong-Il. Watch this space.

One piece of evidence Sheridan presents for his case against his Prime Minister is that Rudd has been urging a greater role for China in the International Monetary Fund; an improved vote in return for an increased financial contribution. Given that China is just about the only country with any spare cash at the moment, this makes a lot of sense. But it is only part of Rudd’s general strategy, supported by America’s Barack Obama and Britain’s Gordon Brown, for an international economic stimulus package to combat the global recession.

The above-mentioned Manning Clark, who was not a Russian agent but our most perceptive and brilliant historian, divided policy makers into two types: the enlargers, who are visionary, ambitious and inclusive, and the punishers and straiteners, who believe in control, restriction and rigid discipline. In economic terms the forthcoming G20 summit in London is shaping up as a confrontation between the two groups, with Rudd, Obama and Brown in the former and the Europeans, led by Germany, France and Spain, in the latter.

It is unfair to characterise them as the good guys versus the bad guys, because no one can be sure which method will work, or indeed if there is any solution at all; the problem is simply unprecedented. But according to the IMF, which is probably the nearest thing to an informed and impartial judge, the various stimulus packages already implemented by some individual nations have had some beneficial effect and more needs to be done urgently, especially if the developing third world economies are to be rescued from financial disaster.

The worst possible result would be for the rich nations to pull up the shutters and retreat behind restrictive trade barriers. This is unlikely to happen, at least immediately, but a concerted international stimulus of the kind envisaged by Rudd and his fellow enlargers looks equally improbable. The best we can hope for is an agreement in principle that while some additional regulation is desirable, a serious program of punishing and straitening is not on the agenda.

This outcome would not please the demonstrators; while nothing the G20 does will ever satisfy them, they at least want to see bankers hanging from the lamp-posts and their assets distributed to the poor. But nor would it please Malcolm Turnbull, as it would allow the media to portray Rudd as leading the forces of righteousness, loved and applauded by everyone but a few Frogs, Krauts and Dagoes. And not even Greg Sheridan likes them much.