Wednesday, 05 May, 2021


Australia cancels Belt and Road deals with China

Foreign Minister Marise Payne said today the federal government would override the Victorian state government’s decision to sign up to the Belt and Road Initiative — a vast network of investments that critics say is cover for Beijing creating Australia cancels Victoria state's Belt and Road deals with China
Patty Aguilar | 22 April, 2021, 04:25

In a statement, a Chinese Embassy spokesman condemned Australia's BRI move, which is expected to plunge the fractured relationship between the two countries into greater acrimony.

The announcement comes as a new scheme came into effect in Australia a year ago enabling the federal government to review deals reached with other nations by the country's states and municipalities.

Payne also said she would revoke a 2004 memorandum of understanding between Victoria's education department and Iran, as well as a scientific cooperation agreement the department signed with Syria in 1999.

ABC News reports Payne said she considered the China BRI arrangements with the southern state of Victoria to be "inconsistent with Australia's foreign policy" or "adverse to our foreign relations".

The Sydney Morning report said that the Morrison government and national security experts were concerned that China was using the agreement with Victoria as a propaganda win to claim the that state government had broken ranks with Australia's China policy.

Australia has scrapped agreements tied to China's Belt and Road initiative, prompting anger from Beijing and adding further strain to tense relations between the countries.

The Victoria state's decision to sign up to China's Belt and Road initiative, with two agreements in 2018 and 2019, drew criticism from the federal government, as well as then-US Secretary of State Mike Pompeo.

Victorian Premier Daniel Andrews blindsided the Federal Government when he first signed the Belt and Road deal with the Chinese government in 2018. The laws allow the government to cancel agreements deemed to threaten Australia's national interest.

A Victorian government spokeswoman told national broadcaster ABC: "The Foreign Relations Act is entirely a matter for the Commonwealth government".

Analysts have warned that Chinese lending for Belt and Road projects could entice developing nations, including Australia's Pacific neighbors, into unsustainable debt, thereby making them vulnerable. Relations worsened past year when Canberra called for an independent probe into the origins of the coronavirus outbreak.

The move to cut ties with the initiative comes against backdrop of deteriorating tensions between Canberra and Beijing.

The Chinese government also remains furious with Australia over foreign interference and investment laws and the decision to ban Huawei from the country's 5G rollout.

China is Australia's largest trading partner and before the pandemic, its biggest source of overseas university students.

Still, the Australian government has denied its new veto power is aimed at China.

Payne said she would "continue to consider foreign arrangements" but expected the "overwhelming majority" would not be affected.

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