China suspends economic accord with Australia

Grant Boone
May 6, 2021

The China-Australia Strategic Economic Dialogue is a high-level diplomatic mechanism, worth more than $150 billion in two-way trade, the Federal Government said.

Tensions between the two countries have slowly worsened since 2018, due to a range of disagreements, such as 5G mobile network technology to espionage charges, treatment over Hong Kong, or the origin of the new SARS-COV-2, known as COVID-19 which is the virus responsible for the pandemic.

In a statement on Thursday, the Chinese National Development and Reform Commission said the China-Australia Strategic Economic Dialogue framework has been suspended, and laid the blame at Australia's feet.

Canberra has been locked in an ongoing trade war with Beijing for several months as China has slapped sanctions on various Australian products.

The statement said the decision was the result of the Australian Government's "current attitude" towards cooperation.

Tehan, however, admitted that no such talks had taken place since 2017.

According to South China Morning Post, China's top diplomat who is in Canberra now, blamed Australia for deteriorating ties between the nations, accusing it of economic coercion and "provocations" in a wide-ranging speech that painted Beijing as a victim.

China had previously already informally stopped ministerial-level communication between the two countries. China's move comes after last month the Australian government dismantled a Belt and Road deal between Beijing and the state of Victoria, and last week Canberra said that a Chinese company's 99-year-lease on Darwin Port was under review.

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"Overall, what we're seeing in Canberra and Beijing is both sides doubling down and hardening their stance", he said. "And now we're seeing co-operation and dialogues even closer to that are being disrupted", he told the BBC.

It is the first major response from the Chinese government since the Morrison government cancelled Victoria's Belt and Road agreement in March.

"If this is the extent of retaliation, then Canberra will be pretty relieved because it strikes me as being quite calibrated".

Until now China has mostly expressed its displeasure through trade measures, which have affected a dozen key Australian industries, including wine, barley and coal.

The Australian dollar sank 0.6 percent soon after the news.

It was not immediately clear if the row would impact on a free-trade agreement between the two that came into effect in 2015.

China is Australia's biggest trading partner, accounting for 29 per cent of Australia's trade with the world in 2019, according to the Department of Foreign Affairs and Trade.

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