China suspends economic dialogue with Australia, plunging relations to new low

China on Thursday suspended an economic dialogue with Australia, stepping up a pressure campaign that began over Australian support for a probe of the coronavirus and has disrupted exports to the country’s biggest foreign market.

Relations have plunged to a multi-decade low since Beijing blocked imports of Australian coal, wheat and other goods over the past year. But it has failed to force Prime Minister Scott Morrison’s government to offer concessions.

Thursday’s suspension “signals a deterioration of the diplomatic relationship” but is largely symbolic, said Caitlin Byrne, a specialist on Australia’s diplomatic relations in the Asia-Pacific region. She said officials haven’t met since 2017.

“It’s certainly an important and symbolic move, but in terms of substance, the impact here is limited,” said Byrne, director of the Griffith Asia Institute at Australia’s Griffith University.

The Chinese government accused Australia of taking steps “to disrupt normal exchanges” due to a “Cold War mindset and ideological discrimination.”

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Beijing will “indefinitely suspend all activities” under the China-Australia Strategic Economic Dialogue, said a statement by the Cabinet’s planning agency, the National Development and Reform Commission.

China holds such dialogues with Australia, the United States and some other governments to discuss trade disputes and other economic issues.

“This is unfortunate. We do need dialogue with China,” said Australian opposition leader Anthony Albanese in Sydney. “It can’t be just on their terms, though. It’s got to be on both countries’ terms.”

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China’s relations with Australia, India and some other neighbours are increasingly strained by the ruling Communist Party’s assertiveness abroad, including claims to disputed territory and accusations Beijing tries to influence politics in Australia and other Western democracies.

China blocked imports of most Australian goods last year after its government called for an investigation into the coronavirus, which emerged in central China in late 2019.

Chinese ministers refuse to take calls from their Australian counterparts.

Australian Trade Minister Dan Tehan expressed disappointment in a statement.

“We remain open to holding the dialogue and engaging at a ministerial level,” Tehan said.

China is Australia’s No. 1 foreign market, but the sanctions impact has been limited because Chinese steel mills still buy Australian iron ore, the country’s most valuable export.

Last month, Australia cancelled two deals signed by the state government of Victoria with Beijing’s multibillion-dollar “Belt and Road” construction initiative on “national interest” grounds.

The Australian foreign minister said the step didn’t target “any one country,” but Beijing warned it might retaliate.

McGuirk reported from Canberra.