SYDNEY - In an exclusive interview, Wednesday, Colin Barnett, Premier of Western Australia, Australia' s economic engine, told Xinhua of his anger and disbelief at the now notorious racist tirade made on live national television Monday by billionaire-politician Clive Palmer.

Barnett, who has traveled to China five times as Premier, said he "totally rejects" the comments made by Palmer, which included describing his business partners - CITIC Pacific - as "mongrels."

Australians outraged at insulting remarks regarding China

In response, Barnett set aside his personal frustration and told Xinhua that CITIC Pacific has in fact paid all royalties owed to the West Australian Government - on time and in full.

"The royalties Mr Palmer is referring to are payments owed to him and his private companies, not royalties owed to the State Government on behalf of the people of Western Australia, which are payments for the iron ore resource."

CITIC Pacific runs a Pilbarra-based 7 billion US dollar project in partnership with Palmer and China's Metallurgical Group Corporation (MGC). According to CITIC, the project is touted to reap 111 billion US dollars in direct revenue to the Australian economy.

CITIC pacific paid 415 million US dollars to the renegade legislator's company - Mineralogy - to mine and fund Palmer royalties for every shipment of steel-making magnetite.

However, when iron ore prices plummeted, the relationship between Palmer and his partners deteriorated.

Since then, the two companies have not been able to find common ground on iron ore pricing and subsequently CITIC has not paid royalties to Palmer's company.

The Western Australian Premier told Xinhua that Palmer's comments were "deliberately misleading."

Barnett's personal indignation was also apparent.

"I find Clive Palmer's comments offensive, abhorrent and damaging to Western Australia's - and Australia's - long-standing relationship with our biggest trading partner."

China remains the state's biggest trading partner, export market and source of imports, with two-way trade topping 77 billion US dollars last year, up 27.6 percent.

WA's exports to China totaled 72.83 billion US dollars, increasing 30 percent year on year and accounting for 70.2 percent of Australia's total exports to China.

Nearly 10,000 Chinese students are studying in WA. And with direct flights between China's Guangzhou and Perth, the number of Chinese tourists is on the rise.

For Barnett, the astonishing outburst by Palmer could not have been further from the feelings of the state that led Australia's search for those lost just months ago on Malaysia Airlines flight MH370.

Having overseen the development of a successful economic and social bond with China, Barnett told Xinhua that the search for MH370 had "deepened that relationship" and was a truer reflection of the ties that have made WA China's home province in Australia.

"Western Australia's long-established relationship with China has to date been focused around trade but the Chinese authorities' assistance with the search for MH370 has broadened and deepened that relationship," Premier Barnett said.

"This is the heart of our relationship - friendship comes first. "

Under Barnett's stewardship, WA has built a long-term partnership with China manifestly incorporating trade and investment built upon the export of minerals, energy, agricultural goods and education services and reliable Chinese investment in the resources sector.

"China is incredibly important to both Australia and Western Australia," Barnett said, before proving his leadership with an apology - the first from an Australian politician over the headline-grabbing insults.

"These comments in no way reflect the view of the West Australian Government and I apologize for any offense caused by Mr Palmer's remarks."

China overtook Japan as WA's largest export market back in 2006, and, according to Barnett, "the friendship is just beginning."