China threatens to retaliate after Australia cancels two Belt and Road agreements

Chinese state media says the Australian government has fired a major shot' in what could be another trade war

China has threatened to take further action against Australia after the Morrison government cancelled Victoria's two Belt and Road agreements, in a sign the diplomatic dispute between the two countries may worsen.

China's foreign ministry said on Thursday it had lodged a solemn" protest with Australia and reserved the right to take further action, just hours after the Chinese embassy in Canberra warned Australia would only end up hurting itself".