Employees talk to each other as they prepare a seminar on Australia-China bilateral resource and infrastructure cooperation in Western Australia, in Beijing on July 23, 2009. REUTERS / Jason Lee
Australia canceled two deals the state of Victoria made with China on Wednesday on Beijing’s flagship Belt and Road Initiative, prompting the Chinese embassy in Canberra to warn that already strained bilateral ties would undoubtedly deteriorate.
Under a retrial in Australia, Secretary of State Marise Payne has the power to review agreements reached by the country’s states and universities with other countries.
Payne said she had decided to cancel four deals, including two that Victoria agreed with China in 2018 and 2019, in partnership with the Belt and Road Initiative, Chinese President Xi Jinping’s signature trade and infrastructure program.
“I consider these four schemes to be in violation of Australia’s foreign policy or in violation of our foreign relations,” she said in a statement.
The Chinese Embassy in Australia late on Wednesday expressed its “strong displeasure and resolute opposition” to the cancellations.
“This is another unreasonable and provocative move on the part of the Australian side against China,” the embassy said in a statement. “It further shows that the Australian government is not sincere in improving relations between China and Australia.”
Bilateral ties were strained in 2018 when Australia became the first country to publicly ban Chinese tech giant Huawei from its 5G network. Relations deteriorated last year when Canberra called for an independent investigation into the origins of the coronavirus outbreak.
Australia’s latest move “will undoubtedly cause further damage to bilateral relations, and will only end up hurting itself,” the Chinese embassy said.
Australia’s federal parliament granted veto power over foreign deals by states in December amid mounting diplomatic feud with China, which has imposed a range of trade sanctions on Australian exports, ranging from wine to coal.
Liberal Prime Minister Scott Morrison and his predecessor Malcolm Turnbull had refused to agree to a country-level MOU with China on the Belt and Road Initiative.
But Victoria’s Prime Minister Dan Andrews signed agreements with China’s National Development and Reform Commission to promote the initiative in 2018 and 2019.
Some countries fear that the loans brought by the Belt and Road scheme could lead to unsustainable debt levels in developing countries, including the Pacific Islands region.
Morrison’s government has denied that its new veto is targeting China, Australia’s largest trading partner and source of foreign university students before the pandemic prompted the country to close its borders.
Payne said states, local governments, and government-funded universities had reported to her a total of more than 1,000 foreign deals.
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