China suspends economic accord with Australia

The formal blow to China-Australia ties is an apparent tit-for-tat response to Canberra scrapping a Belt and Road pact and threatening to undo a port lease deal.

Darwin Port, the latest potential flashpoint between Australia and China.

Beijing has suspended an annual meeting with Australia’s Treasurer and Trade minister – formalising the diplomatic freeze Xi Jinping’s administration has imposed on Canberra since relations unravelled in 2018.

The immediate suspension of the China-Australia Strategic Economic Dialogue was apparently in retaliation to the Morrison government’s scrapping of Victoria’s Belt and Road deal and review of the 99-year lease of the Port of Darwin Port by the Chinese company Landbridge.

Explaining the decision, China’s National Reform and Development Commission said recent measures taken by the Morrison government had revealed its “Cold War mindset” and “ideological discrimination”.

“Based on the current attitude of the Australian federal government towards China-Australia co-operation, the National Development and Reform Commission has decided to suspend indefinitely all activities under the China-Australia Strategic Economic Dialogue mechanism,” China’s top economic planning body said in a statement on Thursday.

Despite being billed as an annual meeting when it was announced by the Gillard government in 2013, the China-Australia Strategic Economic Dialogue only met three times in 2014, 2015 and for the last time in 2017.

Trade Minister Dan Tehan said it was “disappointing” to learn about the formal suspension.

“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,” Minister Tehan said.

“We remain open to holding the dialogue and engaging at the Ministerial level,” he said.

The Australian dollar was down 0.5pc at US77.07c shortly after the announcement, after trading as high as US77.58c during the morning.

The Australian government has previously described the accord — designed to boost trade between both sides and introduce large Chinese investors — as one of the “premier bilateral economic meetings with China”. But relations between the two have plunged into the deep freeze.

China’s move is the first official halt to bilateral co-operation after it launched a series of trade bans, tariffs and restrictions on imports of Australian imports, including coal, wine, barley, timber and seafood, valued at more than $2bn.

The proclamation comes after the Morrison government scrapped Belt and Road initiatives between the Victorian government and China, which were overseen by the National Development and Reform Commission and which are part of China’s massive infrastructure initiative across Asia and the world.

It also comes after Defence Minister Peter Dutton confirmed that his department was reviewing a $500m Port Darwin lease agreement between the Northern Territory and Chinese company Landbridge Group.

Darwin is the most important port on Australia’s north coast, the closest to Asia and a base for US Marines who rotate in and out of the country.

The announcement prompted a furious response from China, which warned of “serious harm” in the already fractured relationship.

Before the suspension announced on Thursday, the last major communication the NDRC had in with Australia was a March 2020 phone call between deputy director Ning Jizhe and Daniel Andrews. Ning reportedly expressed gratitude for the state’s “firm support” for China’s fight against the pandemic and the Victorian Premier’s willingness to “actively explore expansion under the framework of the Belt and Road initiative”.

The last minister-level meetings involving China and Australia were in November 2018 —

when Foreign Minister Marise Payne and her counterpart Wang Yi held talks at the 5th Australia-China Foreign and Strategic Dialogue — and then defence minister Christopher Pyne’s visit to China in January 2019.

With AFP