The Australian government cancelled a vote to ratify a 10-year old extradition treaty
The planned parliamentary vote was to occur two days after China Premier Li Keqiang left Australia where trade deals underpinned fast improving Sino-Australia relations.
But a spokesman for Prime Minister Malcolm Turnbull said the vote had been cancelled, after opposition politicians who control the upper house Senate made it clear they would not support the treaty.
It has been in our national interest to have this agreement
"It has been in our national interest to have this agreement with China. We will speak with our Chinese friends in more detail and decide what to do," Foreign Minister Julie Bishop told a news conference.
Political opposition to the treaty in Australia stems from concerns over China's humanitarian record, with human rights groups regularly accusing Beijing of obtaining confessions through torture.
The vote was meant to occur two days after Li Keqiang left Australia
Australia's inability to ratify the extradition treaty is a blow to China's overseas hunt for corrupt officials and business executives who have fled abroad with their assets, dubbed Operation Fox Hunt.
It also comes as three Australian employees of casino operator Crown Resorts remain in Chinese custody following their arrest in November 2016 for alleged gambling offences.