China suspends economic dialogue with Australia

China has suspended its main economic talks with Australia in the latest blow to relations between the two trade partners.

China's top economic planning agency the NDRC announced the suspension of the talks today, following a move by the Australian government last month to end infrastructure agreements between a state government and Beijing.

"Based on the current attitude of the Australian Commonwealth Government toward China-Australia co-operation, the [NDRC] decides to indefinitely suspend all activities under the framework of the China-Australia Strategic Economic Dialogue," the NDRC said. The strategic dialogue mechanism is one of the main forums for economic talks between the two countries.

The decision adds to deteriorating trade relations between the two countries, which have all-but halted Australia's thermal and coking coal shipments to China. Beijing has also imposed tighter restrictions on other Australian exports to China, including wine and barley. Iron ore, by far the largest trade item, has so far been largely unaffected by the tensions.

The latest blow to relations was the Australian federal government's decision to cancel agreements reached between China and the Victorian state government under Beijing's Belt and Road Initiative (BRI). Those agreements were inconsistent with Australia's foreign policy and adverse to Canberra's foreign relations, the federal government said.

Canberra is also considering overturning the 2016 sale of Darwin Port in the Northern Territory to Chinese infrastructure and energy firm Landbridge. Around 2,500 US troops are stationed near the port, raising fears in Australia that China may use its ownership of the port to spy on military movements in Darwin, a key military base.

Australian thermal coal exports dropped to an eight-year low in March, official trade data showed this week, partly because there were no shipments to China for a third consecutive month amid the trade tensions.

China accounted for 35pc of Australia's total merchandise exports in March, or A$13.42bn ($10.37bn), according to the data.

By Kevin Morrison