China will “indefinitely suspend” its economic dialogue with Australia in a major escalation of the tensions between the two countries.
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.
“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 said.
The statement said the decision was the result of the Australian Government’s “current attitude” towards cooperation.
It said Australian government officials had damaged conversations between the two countries and was in a "Cold War mindset" and accused the Government of "ideological discrimination".
This salvo essentially cuts off all diplomatic contact under the Economic Dialogue and marks the first formal freeze in diplomatic relations since early 2020.
It will take immediate effect.
The dialogue was formed in 2014 and works to foster investment and trade between Australia and China and last met in 2017.
Worsening Australia-China tensions
It comes after the Commonwealth Government barred Victoria’s participation in the major Chinese Belt and Road Initiative.
Australia has also announced it is reviewing China’s ownership of a strategically important port in the Northern Territory.
The Australian National Security Committee had requested the Defence Department look at the ownership, with forced divestment potentially on the table.
Home Affairs secretary Michael Pezzullo also stoked tensions with China after warning that the "drums of war" were growing louder. Defence Minister Peter Dutton has also said war with China should not "be discounted".
Beijing branded these comments as "crazy" and the words of "troublemakers".
China-Australia relations have grown sour since the Morrison Government last year led calls for an independent investigation into the origins of the COVID-19 outbreak.