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China ‘Indefinitely' Suspends Economic Dialogue With Australia

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  • China said it has "indefinitely" suspended all activity under a high-level economic dialogue with Australia, one if its largest source of imports.
  • Relations between China and Australia deteriorated last year after Canberra called for an international inquiry into the origins of the Covid-19 pandemic.
  • The Australian government has increased scrutiny on foreign deals, and in April canceled two involved with Beijing's Belt and Road Initiative.

BEIJING — Strained relations between China and Australia took a turn for the worse Thursday after Beijing said it has "indefinitely" suspended all activity under a high-level economic dialogue with one if its largest source of imports.

It was not immediately clear what impact the announcement would have on trade between the two countries, which has already fallen amid retaliatory pressure from Beijing.

The Australian dollar weakened against the U.S. dollar following the news, falling close to breaking 77 cents after trading near 77.47 cents Wednesday.

Beijing's economic planning agency, the National Development and Reform Commission, said in an English-language statement Thursday that some Australian officials recently launched unspecified measures "out of a Cold War mindset" to disrupt cooperation with China.

The commission said that based on this attitude, it has decided to "indefinitely suspend all activities under the framework of the China-Australia Strategic Economic Dialogue."

Australia's Minister for Trade, Tourism and Investment, Dan Tehan, said in a statement the decision is "disappointing" and that the country remains open to "holding the dialogue and engaging at the Ministerial level."

The China-Australia Chamber of Commerce in Beijing did not immediately respond to a request for comment.

The last meeting under the dialogue was in 2017. The first meeting was held in 2015, when the two countries signed a free trade agreement. At the time, China was Australia's largest trading partner.

Tensions began to pick up in 2018 with Australia's 5G network ban on Chinese telecommunications giant Huawei and worsened with a call for an independent investigation into the origins of Covid-19.

China has since launched anti-dumping probes into Australian wine imports and unofficially banned coal imports from the country, among other restrictions. China still buys iron ore from Australia, for a total of about $115.10 billion in U.S. dollars' worth of imported Australian goods in the 12 months to March, according to Reuters.

The Australian government has increased scrutiny on foreign deals and in April canceled two involved with the Belt and Road Initiative. Critics say the regional infrastructure development program is a way for Beijing to expand its influence overseas.

Earlier this week, Reuters reported, citing a government source, that Australia is reviewing the lease of a port to a Chinese firm.

Correction: This story was updated to correct the name of the National Development and Reform Commission.

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