22 Apr ‘Debt trap’: Bipartisan support for tearing up Victoria’s Belt and Road agreement
Anthony Galloway and Hanna Mills Turbet – The Sydney Morning Herald – Thursday 22 April 2021
National security experts and federal Labor have welcomed the Morrison government’s decision to tear up Victorian Premier Daniel Andrews’s Belt and Road agreement with the Chinese government, but some have warned it now needs to manage the fallout including economic retaliation from Beijing.
Foreign Minister Marise Payne announced on Wednesday night that the Belt and Road Initiative deal – which tied the state to Chinese President Xi Jinping’s signature initiative to bankroll infrastructure projects around the world – has been cancelled under the Commonwealth’s new foreign veto laws.
The two deals Victoria struck with the Chinese government under President Xi Jinping’s signature foreign policy have been ruled invalid under the nation’s new foreign veto laws on the basis that it contradicts Australia’s foreign policy of countering the infrastructure spending blitz around the world.
China’s foreign mission reacted swiftly on Wednesday night, warning the decision would put any recovery in the relationship between Australia and its largest trading partner in jeopardy.
“The Victorian Government has accepted this veto decision and that’s a good thing,” she said. “The Morrison government should now engage constructively with states to manage the impacts of these new laws.”
Labor senator Kimberley Kitching, chair of federal Parliament’s Foreign Affairs, Defence and Trade References Committee, said it was a rare event for federal Labor, the government, the Greens and crossbench to agree on a policy.
“It says a lot about the problems with Belt and Road that this is one of those issues,” she said. “I’ve long said it was bad policy and bad optics, and it is a good thing that Australia and much of the free world has arrived at a shared understanding about this debt trap.”
“One of the imperatives in our region is to encourage our neighbours to avoid costly Belt and Road mistakes. The best way we can do that is to ensure we’re united as a country on Belt and Road and continue to engage with our neighbours actively and generously.”
Liberal senator James Paterson, chair of Parliament’s security and intelligence committee, said “Australia welcomes international engagement, but on our terms and in our national interest”.
“This decision shows if you want to do business with Australia you must come through the front door in Canberra, not go behind our backs to others,” he said.
Victoria’s state opposition leader Michael O’Brien told 3AW, “Under Belt and Road, Daniel Andrews has given away major infrastructure contracts to Chinese-owned companies. They are building the West Gate Tunnel, the Metro Tunnel, they are building our high-capacity trains”.
“In return, the Chinese government has smashed our farmers with tariffs on barley. They have smashed our wine exporters with trade sanctions,” he said.
“Politically it helps Daniel Andrews because this was a running sore for him because he was out of step with the public and the federal government. This gives him an out. This decision is a graphic illustration of the fact that security and diplomatic interests are now intertwined with economic interests, and any decision that misses that point leads to really bad decisions like Victoria’s two BRI agreements.”
The Lowy Institute’s executive director Michael Fullilove said it “would be strange if Beijing were to object to this move by Canberra”.
James Laurenceson, director of the Australia-China Relations Institute at the University of Technology Sydney, said the Morrison government was right to be annoyed with Beijing for striking the deal with a state government, but said it could have just waited for the deal to expire instead of striking it out. He said the decision has come after “several months of relative restraint from both sides” after relations between the two countries last year deteriorated to their worse level in decades.
“Let’s be clear what has been ‘cancelled’: a non-legally binding agreement that didn’t commit the Victorian government to doing anything, let alone the national government,” Professor Laurenceson said.
“Canberra’s annoyance with Beijing for striking this deal with a state government is understandable. If the shoe was on the other foot Beijing wouldn’t cop it. But acting as Beijing would act isn’t a model Australian foreign policy should be aspiring to.”
The federal government and national security experts have been concerned that China was using the BRI to load up poorer countries with debt and reduce Australia’s influence in the region.
The Victorian government said the decision was a matter for the Commonwealth. The state government had previously defended the deal on the basis it would provide more jobs and economic opportunities for Victoria.