Photo: Xinhua

Australia may be close to taking another step toward damaging its relationship with China. The Australian federal government is considering axing a research agreement between the Victorian government and East China's Jiangsu Province, according to the Australian news outlet The Age.

The deal reportedly facilitates Victorian companies and universities to share intellectual property and develop new products with companies in Jiangsu Province. 

Total grants under the agreement, signed in 2015, only add up to $200,000, according to media reports. It also goes without saying that the research work under the agreement is unlikely to have involved any core or sensitive technologies. By any measure, the absence of such a deal will not affect China's scientific progress.

Yet the news about a potential ending of the research agreement has attracted wide attention. Against the backdrop of the deteriorating China-Australia relationship, the reported move could send a negative signal that Canberra might continue trying all kinds of measures to sabotage bilateral cooperation, dealing another blow to market confidence.

At present, bilateral trade between the two countries has encountered unprecedented difficulties, which many fear may affect domestic employment in Australia. For instance, there are already reports from Australian media outlets suggesting hundreds of jobs may be lost due to a necessary ban Chinese customs imposed on timber log imports coming out of several Australian states after finding banned pests in several shipments. 

The outlook for the Australian economy itself is also gloomy. The coronavirus pandemic has brought an unexpected end to Australia's 28-year run of economic growth in 2020. As for the coming 2021, while the Australian government painted a rosier picture by projecting that its economy will grow 4.5 percent next year and recover faster than previously anticipated after containing the spread of the COVID-19, the Organization for Economic Cooperation and Development (OECD) said in its latest Economic Outlook report that Australia's unemployment rate could be approaching 8 percent. The OECD also urged Canberra not to withdraw its fiscal and monetary policy support too soon. 

The OECD is also one of the numerous institutions that cautioned any further escalation of China-Australia tensions could harm Australia's economic growth outlook.

Unfortunately, Australia appears to be ignoring such reminders and instead chooses to stubbornly continue down the path of undermining China-Australia relations. And with economic recovery dragged down by shaky market confidence, its domestic unemployment problem is bound to only get worse.