Australia on Wednesday canceled two deals struck by its Victoria province with China on Beijing’s flagship Belt and Road Initiative, prompting the Chinese embassy in Canberra to warn that tense bilateral ties are already bound to worsen.
Under a new process in Australia, Foreign Minister Marise Payne has the power to review bargains reached by other nations by the country’s states and universities.
Payne said she had decided to cancel four deals, including two that Victoria agreed with China, in 2018 and 2019, on cooperation with the Belt and Road Initiative, Chinese President Xi Jinpingtrade plan and signature infrastructure.
“I consider these four arrangements to be inconsistent with Australia’s foreign policy or detrimental to our foreign relations,” he said in a statement.
The Chinese embassy in Australia voiced its “strong dissatisfaction and opposition” to the cancellations late Wednesday.
“This is another irrational and provocative move taken by the Australian side against China,” the embassy said in a statement. “It further demonstrates that the Australian government has no sincerity in improving relations between China and Australia.”
Bilateral relations were strained in 2018 when Australia became the first country to publicly ban Chinese tech giant Huawei from its 5G network. The links deteriorated last year when Canberra called for an independent probe into the origin of the coronavirus outbreak.
Australia’s latest move “is certain to bring further damage to bilateral relations, and will only ultimately hurt itself,” the Chinese embassy said.
Australia’s federal parliament placed the veto power over foreign bargains by states in December amid the deepening diplomatic tongue 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 country-level MOU with China on the Belt and Road Initiative.
But Victoria’s Labor state premier Dan Andrews signed agreements with the China National Development and Reform Commission to promote the initiative in 2018 and 2019.
Some countries fear that borrowing the Belt and Road scheme could lead to unsustainable debt levels in developing nations, including the Pacific island region.
The Morrison government has denied that its new veto power was aimed at China, Australia’s largest trading partner and largest source of foreign university students 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 deals overall.