Singapore: Beijing has cut off all diplomatic contact with the Australian government under the China-Australia Strategic Economic Dialogue, once a key channel of communication between the two countries.

The move, announced by China’s National Development and Reform Commission on Thursday morning, will make the task of repairing already strained diplomatic relations even more difficult as it will block contact between key trade and economic officials at and below the ministerial level.

The decision is the first major Chinese government response to the Morrison government’s cancellation of Victoria’s Belt and Road agreement in April.

The dialogue was established in 2014 in Beijing as a forum for the Australian treasurer, trade minister and the chairman of China’s National Development and Reform Commission to discuss investment and trade deals.

The Australian dollar fell quickly on the news, dropping 0.4 per cent to US77.16¢ after earlier trading at US77.58¢.

In a rare public proclamation published on the government website, the commission said Australian government officials had launched a series of measures to disrupt normal exchanges and cooperation between China and Australia “out of a Cold War mindset and ideological discrimination”.

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“Based on the current attitude of the Australian Commonwealth Government toward China-Australia cooperation, the National Development and Reform Commission of the People’s Republic of China decides to indefinitely suspend all activities under the framework of the China-Australia Strategic Economic Dialogue,” it said in the statement.

As treasurer, Prime Minister Scott Morrison was one of the last ministers to travel to Beijing under the dialogue in 2017. He met with large Chinese investors and Chairman He Lifeng of China’s National Development and Reform Commission to discuss “opportunities for Australian and Chinese businesses to cooperate.”