China has "indefinitely" suspended key economic dialogue with Australia, the latest in a growing diplomatic rift between both countries.

Relations have been decreasing since Australia called for an inquiry into the origins of the virus and also banned Huawei from building its 5G network. China had imposed sanctions on Australian goods like wine and beef, in the previous year.

A Chinese government commission, in a statement on Thursday, accused Australia of having a cold war mindset. Some Australian Commonwealth Government officials recently, launched a series of measures to interrupt the normal exchanges and cooperation between China and Australia out of cold war mindset and ideological unfairness, was said in a statement by " China's National Development and Reform Commission (NDRC).

Responding to the decision, Australian Trade Minister Dan Tehan said it was disappointing but added that Canberra was still open to discussions. The China-Australia Strategic Economic Dialogue was previously described by Canberra as one of the "premier bilateral economic meetings with China".

Previously, China had informally stopped ministerial-level communication between the two countries. The Director of the Australia-China Relations Institute, James Laurenceson said Beijing's move appears to be extending the diplomatic freeze.

He also told BBC that, "Up until now, both Canberra and Beijing have been saying that the lower-level day-to-day nitty-gritty continues as normal. And now we're seeing dialogues and co-operation even closer to that are being disrupted".

Strained trade ties

The move appears to the be the latest in a thread of tit-for-tat measures between both of these countries. Beijing appears to be a responding directly to the Australian government's cancellation of two deals that the state of Victoria struck with China as part of its flagship Belt and Road Initiative, said Mr Laurenceson. He also said, "If this is the extent of retaliation, then Canberra will be pretty relieved because it strikes me as being quite calibrated. We're a long way here from withdrawing from something like CAFTA (the China-Australia free trade agreement)".

The Australian government has also reportedly pursued for new security advice over the port of Darwin, which has been leased to Chinese-owned company “Landbridge”, with some media channels proposing that the company could be forced to deprive on national security grounds.

Up until now China has mostly expressed its annoyance through trade measures, which have affected a dozen key Australian industries, including barley, coal and wine. According to the Department of Foreign Affairs and Trade, China is Australia's biggest trading partner, accounting for 29 per cent of Australia's trade with the world in the year 2019. According to the Australian National University's Chinese Investment in Australia Database, Chinese investment in Australia dropped to 61% in 2020, the lowest number in 6 years.