China said on Thursday it had suspended an economic deal with Australia, in a seemingly tit-for-tat response to Canberra’s removal of a belt and road infrastructure pact and the threat cancel an agreement to lease the port of Darwin to a Chinese company.

The China-Australia strategic economic dialogue agreement was reached “on the basis of the current attitude” of the Australian government, China’s National Development and Reform Commission said in a statement, accusing some officials of “ideological discrimination.” .

Beijing “will indefinitely suspend all activities under” the agreement, the statement said.

The Australian dollar fell 0.6% soon after the news broke.

The Australian government has previously described the deal – designed to boost trade between the two sides and introduce large Chinese investors – as one of the “first bilateral economic meetings with China.”

But relations between the two have frozen over.

Prime Minister Scott Morrison’s government last month scrapped a Belt and Road agreement between Beijing and Victoria state – part of China’s massive infrastructure initiative across Asia and the world.

And this week, Australia said a Chinese company’s controversial 99-year lease on Darwin’s port was also under review and could be dropped.

Darwin is the most important port on the north coast of Australia, the closest to Asia, and a base for US Marines who rotate in and out of the country.

The announcement sparked a furious backlash from China, which warned of “serious damage” to the already fractured relationship.

rox / apj / dan