China has announced it will indefinitely suspend all activities under the China-Australia Strategic Economic Dialogue.

The Chinese government has announced the first formal freeze of a diplomatic mechanism amid decaying relations between the two countries.

The National Reform and Development Commission, China's main planning body, said the suspension is in direct response to actions by the Australian government.

Beijing accuses Australia of undertaking a “series of measures to disrupt normal exchanges and cooperation”.

It is strongly believed that this is due to the Morrison government last month cancelling a Belt and Road agreement between China and the state of Victoria.

China claims the Commonwealth government is engaging with a “Cold War mindset” that leads it to practice “ideological discrimination”.

“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,” the National Development and Reform Commission said in a statement.

Reports say China had already frozen high-level ministerial communication.

There was strong speculation earlier this week that the Federal Government might see China’s ownership of Darwin Port as its next diplomatic battleground.