Economic Dialogue With Australia ‘Indefinitely’ Suspended By China

The relations between China and Australia were already tense and it took a turn for the worst this week after Beijing announced an indefinite suspension of all activities that were being undertaken under a high-level economic dialogue with Australia – which is one of the largest exports into China.

The mutual trade between the two countries had already taken a hit because of retaliatory pressure from Beijing and it was not clear how that would be hit further because of the announcement by China.

Following the news, there was a fall in the Australian dollar against the US dollar.

A section of Australian officials had recently launched unspecified measures “out of a Cold War mindset” with the aim of disrupting cooperation with China, said Beijing’s economic planning agency, the National Reform and Development Commission, in an English-language statement.

It was because of this attitude that it had decided to “indefinitely suspend all activities under the framework of the China-Australia Strategic Economic Dialogue,” the commission said.

The decision is “disappointing” and the country remains open to “holding the dialogue and engaging at the Ministerial level”, Australia’s Minister for Trade, Tourism and Investment, Dan Tehan, said in a statement about the Chinese decision.

There were no comments on the issue available from the China-Australia Chamber of Commerce in Beijing.

The last meeting under the dialogue was in 2017. In 2015, China and Australia had signed a free trade agreement and the first meeting of the commission was held in 2015. China was Australia’s largest trading partner at that time.

The relations between the two countries had started to get sour in 2018 with Australia banning Chinese telecommunications giant Huawei from 5G networks in Australia. Relationship with Beijing was further worsened after Australia called the world powers to conduct an independent investigation into the origins of Covid-19.

There has been an effective unofficial ban on coal imports from Australia by and anti-dumping probes into Australian wine imports have been started by China since then, in addition to other restrictions. In the 12 months to March, the total export of iron ore from Australia to China was of about $115.10 billion in US dollars.

There has been an increased scrutiny by the Australian government in recent time of foreign deals and two deals related to the Belt and Road Initiative of China were cancelled by the Australian federal government. The Belt and Road Initiative is a dream project for Chinese president Xi Jinping and is concerned with regional infrastructure development which critics say is a way for China to increase its regional dominance and influence overseas.

There were media reports earlier this week in Australia, citing sources in the government, about the Australian government considering cancellation of the lease of a port in the country to a Chinese firm.

(Adapted from CNBC.com)



Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Uncategorized

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