Relations have been on the decline since Australia pushed for a World Health Organisation probe into the origins of coronavirus and also banned Chinese smartphone maker Huawei from providing 5G technology for the country’s wireless networks.
“Recently, some Australian Commonwealth government officials launched a series of measures to disrupt the normal exchanges and cooperation between China and Australia out of Cold War mindset and ideological discrimination,” the statement by China’s National Development and Reform Commission said.
“Based on the current attitude of the Australian Commonwealth government toward China-Australia cooperation, the National Development and Reform Commission of the People’s Republic of China decides to indefinitely suspend all activities under the framework of the China-Australia Strategic Economic Dialogue jointly held by the National Development and Reform Commission of the People’s Republic of China and relevant ministries of the Australian Commonwealth Government.”
Australia’s minister for trade, tourism and investment, Dan Tehan, told the media China’s announcement was “disappointing” and added that Canberra was still open to discussions.
Mr Tehan said in a tweet: “It is disappointing to hear that the NDRC has made this decision. The Strategic Economic Dialogue, which was last held in 2017, is an important forum for Australia and China to work through issues relevant to our economic partnership.”
China had already informally stopped any ministerial-level communications between the two countries.
Speaking with BBC News, James Laurenceson, the director of the Australia-China Relations Institute said: “Up until now, both Canberra and Beijing have been saying that the lower level day-to-day nitty-gritty continues as normal. And now we’re seeing co-operation and dialogues even closer to that are being disrupted.”
Meanwhile, China’s foreign ministry spokesman, Wang Wenbin, told the media that Australia must bear full responsibility.
He added that the suspension was a “necessary and legitimate” response to Australia “abusing” the concept of national security to pressure cooperation with China, Reuters reported.
He said: “We urge the Australian side to abandon the Cold War mentality and ideological prejudice and stop the crazy crackdown on China-Australia cooperation.”
China’s suspension of key economic dialogue with Australia comes in the wake of the country cancelling two deals signed by the state of Victoria with China’s multibillion-dollar ‘Belt and Road’ construction initiative.
Caitlin Byrne, director of the Griffith Asia Institute at Australia’s Griffith University and a specialist on Australia’s diplomatic relations in the Asia-Pacific region, told the media that “it is certainly an important and symbolic move, but in terms of substance, the impact here is limited.”
Yanting Zhou, senior economist at Wood Mackenzie told Reuters that the dispute will continue to have an impact on Australia’s commodities sector by discouraging Chinese investment and it indicated that effective bans on Australian imports are set to continue.
China has effectively banned imports of Australian thermal coal. Since December, copper concentrate imports to China have also slumped, it said.
Meanwhile, the Australia China Business Council, in a statement said that the suspension of the dialogue “marks a new low” in the relationship and was deeply troubling to the business community.
“There is little to be gained from pointing fingers of blame. But this is a serious diplomatic challenge that cannot be dismissed as just another case of Beijing ramping up the pressure on Australia.”
The Business Council added: “Some commentators are describing Beijing’s announcement as largely symbolic with little immediate impact on trade. This misses the point. Business and consumers in China take their cues from Beijing and there is no disguising the parlous state of the political relationship with Australia.
“This will have an impact over time as business and consumers look elsewhere. And it further erodes the confidence of Australian companies doing business with China.”