China indefinitely suspends strategic economic dialogue with Australia


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China on May 6, 2021 “indefinitely” suspended all activity under the China-Australia Strategic Economic Dialogue. This is the latest setback in the already strained relations between the two nations. 

China’s National Development and Reform Commission (NDRC) issued a short statement on the decision, which read, “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 commission did not mention say what specific measures prompted the action on their part. The Australian dollar fell sharply following the news, as low as 0.7701 to the US dollar from $0.7747.

Australia’s Reaction

Australian Trade Minister Dan Tehan commented on the decision saying it was “disappointing” because the economic dialogue was “an important forum for both the nations to work through issues relevant to their economic partnership. 

Tehan said in a statement that Australia remains open to holding the dialogue and engaging at the ministerial level with China. 

Australia-China Strained Bilateral Ties

•The bilateral ties between China and Australia have been under strain since 2018 after Australia became the first country to publicly ban Chinese tech giant Huawei from its 5G network. 

•Australia was also one of the countries that called for an independent investigation into the origins of the novel coronavirus in 2020, which worsened the relations between the two and prompted trade reprisals from China.

•The Australian government also cancelled two Belt and Road cooperation deals struck by the state of Victoria in April 2021, which again prompted the Chinese embassy to warn that the ties between the two nations were bound to worsen.

•China has retaliated by imposing a series of trade sanctions on Australian exports ranging from wine and beef to coal. 

•The successive Australian trade ministers failed to secure a phone call with their Chinese counterparts since diplomatic tensions worsened in 2020.

•The last meeting of the trade ministers of the two nations was in Beijing in 2017, when Australia’s trade minister had signed an agreement on cooperation on Belt and Road projects in third-party countries.

Background

China is one of Australia’s biggest trading partners, accounting for 29 percent of Australia’s trade with the world in 2019. This is as per the data of the Australian Department of Foreign Affairs and Trade.

However, Chinese investment in Australia fell by 61% in 2020, the lowest number in around six years, as per the Australian National University’s Chinese Investment in Australia Database.

China’s recent trade sanctions have affected several key Australian industries including wine, barley and coal.



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