SYDNEY - Australia needs to tone down its rhetoric on China or risk a new Cold War, which will threaten global economic growth and the handling of global challenges, Ian Goldin, former vice president of the World Bank, said.

Goldin, also professor of globalization and development at the Oxford University, made the remarks on Monday while addressing the Diggers & Dealers mining conference in Kalgoorlie in West Australia, according to local media the Australian.

"Threat of a new Cold War is real. It's my greatest fear at the moment. I believe a Cold War is hugely destabilizing for the world economy; will slow global growth; takes away opportunities and will lead to excuses for protectionism and nationalism which will be the antithesis of global trade," he said.

Australia's "sabre-rattling" is a mistake and will continue to escalate tensions between the two countries, he added.

Goldin also warned that there could be no solutions to major global challenges, including global warming, cyber security threats, or another pandemic, without China's participation, and increasingly hostile relations between the United States and China, and Australia and China, would only delay action on both existing and emerging problems.

"Sabre rattling and talking the tensions up is not the right approach," he said.