China payback kills dialogue

Michael Smith and Andrew Tillett

Updated May 6, 2021 – 9.03pm, first published at 1.24pm

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China has moved a step closer to severing any future trade cooperation with Australia after suspending a key agreement for regular high-level economic dialogue in retaliation for the Morrison government’s decision to scrap Victoria’s Belt and Road Initiative.

With friction between the two countries expected to escalate in coming weeks, attention is turning to whether Beijing will move to sever the historic China-Australia Free Trade Agreement (ChAFTA) altogether or undermine the comprehensive strategic partnership between both countries. Government sources stressed that this was not an immediate worry as such moves would hurt the Chinese economy.

Michael Smith is the health editor for The Australian Financial Review. He is based in Sydney.

Andrew Tillett writes on politics, foreign affairs, defence and security from the Canberra press gallery.