China's relations with Australia, India and some other neighbors are increasingly strained by the ruling Communist Party's assertiveness overseas, including claims to disputed territory and accusations Beijing tries to influence politics in Australia and other Western democracies.
According to South China Morning Post, China's top diplomat who is in Canberra now, blamed Australia for deteriorating ties between the nations, accusing it of economic coercion and "provocations" in a wide-ranging speech that painted Beijing as a victim.
China has chose to "indefinitely suspend" all activities under the China-Australia Strategic Economic Dialogue, the country's state planner, the National Development and Reform Commission, said in a statement explaining the decision on Thursday.
Relations between Beijing and Canberra plummeted a year ago after Australia called for an global inquiry into the origins of the COVID-19 pandemic and introduced foreign interference legislation.
Beijing will "indefinitely suspend all activities under the framework" of the agreement, the statement said.
Tehan, however, admitted that no such talks had taken place since 2017.
Chinese investment in Australia plummeted 61% in 2020, the lowest number in six years, according to the Australian National University's Chinese Investment in Australia Database.
Canberra has previously described the accord - created to boost trade between both sides and introduce large Chinese investors - as one of the "premier bilateral economic meetings with China".
But relations between the two have sunk into the deep freeze. But it has failed to force Prime Minister Scott Morrison's government to offer concessions. "That's not to say that (there won't be) a number of months of challenges in the government relations", he told the conference in Sydney.
Chinese President Xi Jinping has overseen an increasingly antagonistic China.
The announcement prompted a furious response from China, which warned of "serious harm" in the already fractured relationship.
But critics have claimed the stand-off between the two sides is cover for Beijing to create geopolitical and financial leverage.
China is Australia's No. 1 foreign market, but the sanctions impact has been limited because Chinese steel mills still buy Australian iron ore, the country's most valuable export. The cancellation could also mean an end to further Sino-Australian cooperation in the fields of industrial production, biotechnology and agriculture, reported DW.