Australia cancels belt and road agreements; China warns of further damage to ties

Australia on Wednesday canceled two agreements its state of Victoria had struck with China under the flagship Beijing Belt and Road initiative, prompting the Chinese embassy in Canberra to warn that already strained bilateral relations are sure to get worse.

As part of a new process in Australia, Foreign Minister Marise Payne has the power to review agreements made with other countries by states and universities across the country.

Payne said she had decided to cancel four deals, including two that Victoria had agreed with China, in 2018 and 2019, on cooperation with the Belt and Road initiative, the president’s signature trade and infrastructure scheme. Chinese Xi Jinping.

“I consider these four arrangements to be incompatible with Australia’s foreign policy or unfavorable to our foreign relations,” she said in a statement.

The Chinese Embassy in Australia expressed “strong discontent and steadfast opposition” to the cancellations on Wednesday evening.

“This is another unreasonable and provocative move taken by the Australian side against China,” the embassy said in a statement. “It further shows that the Australian government has no sincerity in improving Sino-Australian relations.”

Bilateral relations 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 inquiry into the origins of the coronavirus outbreak.

Australia’s latest move “is sure to further damage bilateral relations, and will only end up hurting itself,” the Chinese embassy said.

Australia’s federal parliament granted the veto power over foreign deals made by states in December amid an intensified diplomatic row with China, which has imposed a series 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 nationwide memorandum of understanding with China on the Belt and Road initiative.

But Victoria Labor premier Dan Andrews signed deals with China’s National Development and Reform Commission to promote the initiative in 2018 and 2019.

Some countries fear that the granting of loans under the Belt and Road program could lead to unsustainable levels of debt in developing countries, including the Pacific Island region.

Morrison’s government has denied that its new veto power targets China, Australia’s biggest trading partner and biggest source of students at foreign universities before the pandemic led the country to close its borders.

Payne said states, local governments and publicly funded universities have notified him of more than 1,000 foreign agreements in total.