SYDNEY – Until this week, it seemed that the election of Australian Prime Minister Anthony Albanese in May 2022 had not only ended the frosty ties between Canberra and Beijing but also set the two countries on a giddy path towards reconciliation.

High-level meetings had resumed, China dropped most of its economic sanctions on Australian exports and Mr Albanese visited Beijing in November 2023 – the first trip by an Australian leader in seven years.

But these steps towards improving relations came to a shuddering halt on Feb 5, as a Beijing court delivered a death sentence to Australian citizen Yang Hengjun, a pro-democracy activist and writer who was born in China.

The court suspended the verdict for two years so long as Yang, 58, a former state security agent of China who was found guilty of “espionage”, does not commit any offences.

The sentence came as a shock to Australia, which had been buoyed by the release in October 2023 of Australian journalist Cheng Lei, who was freed after three years in prison, apparently for breaking an embargo by a few minutes.

The previous release in September 2021 of two Canadians accused of espionage, Mr Michael Spavor and Mr Michael Kovrig, had also raised hopes that China might release Yang. The Canadian pair were freed after a bid to extradite Huawei executive Meng Wanzhou from Canada was dropped.

But the decision to impose the death penalty on Yang – a father-of-two allegedly convicted over an offence that occurred 28 years ago – came as a severe blow to efforts by Canberra to repair – or “stabilise”, as Mr Albanese warily describes it – the relationship with China.

Mr Albanese and his foreign minister, Ms Penny Wong, have strenuously insisted that their approach to China is to “cooperate where we can and disagree where we must”, but they clearly hoped that there would be more cooperation than disagreement. Yang’s sentence came as a crushing end to these hopes.

Responding to the sentence on Feb 6, Mr Albanese did not attempt to conceal his fury.

“We have conveyed, firstly, to China our dismay, our despair, our frustration, but to put it really simply, our outrage at this verdict,” he told reporters.

“This is a very harsh sentence on Dr Yang, who is a man who’s not in good health. And we will continue to make the strongest representations.”

The fallout in the relationship has already become apparent.

On Feb 5, Australia’s Department of Foreign Affairs and Trade summoned China’s Ambassador to Australia, Mr Xiao Qian, for an explanation of the verdict. The meeting, with the department’s secretary Jan Adams, lasted about 20 minutes.

The next day, Mr Albanese would not say whether he will now withdraw an invitation to Chinese Premier Li Qiang to visit Australia following the sentence.

“We’ll respond directly and clearly and unequivocally to China,” he said. “What we won’t do is conduct diplomatic negotiations through the media. That’s not what we do.”

The decision to imprison Yang in 2019 was seen in Australia as part of China’s attempts to punish it as tensions between the countries increased.

Beijing was angry at several actions by Australia, including its decision to block Chinese telecommunications giant Huawei from its 5G roll-out and its legislation to curb foreign interference, which was seen as targeting China.

Australia stood by its policies, but, following the election of Mr Albanese, began to soften its rhetoric and signal a readiness for a restoration of ties.

Yet the sentencing of Yang is likely to raise Canberra’s suspicions and leave the Albanese government much less optimistic about the trajectory of the relationship.

Dr Feng Chongyi, an associate professor of China studies at the University of Technology, Sydney, who supervised Yang’s doctorate, told The Sydney Morning Herald that Beijing wants Canberra to “submit” to it, including trying to separate Australia from the United States, its main ally.

“They (the Communist Party of China) can want stabilisation and they want Australia to submit, and they want both at the same time,” he said on Feb 6.

“Xi Jinping’s catchphrase is ‘I want this and, in the meantime, I want this as well’... They want everything,” he added, referring to the Chinese President.

An analyst at the Lowy Institute, Mr Richard McGregor, noted that Yang’s case reflects the growing assertiveness of China’s Ministry of State Security, which may have wanted to send a warning to other pro-democracy activists.

Mr McGregor noted that Yang’s previous work at the ministry meant that he may have been subject to harsher treatment than prisoners such as Ms Cheng, whose detention was more overtly caught up in the deteriorating ties between Canberra and Beijing.

Reflecting on the course of Australia’s ties with China, Mr McGregor told ABC News on Feb 6: “Over the past year and a half, the Albanese government has built a floor over the relationship.”

But he added: “It’s pretty clear now that there is also a ceiling – and a pretty low one at that.”