Australia cancels the state’s Belt and Road deal with China

Australia announced Wednesday that it would revoke the state government’s deal to join China’s Belt and Road Initiative, saying it is inconsistent with the nation’s foreign policy.

Last year, Canberra introduced new laws that are widely considered to be targeting China that allows it to abolish any agreements between state and foreign authorities deemed to threaten the national interest.

Foreign Minister Marise Payne said Wednesday that the federal government would override the decision of the Victorian state government to join the Belt and Road Initiative – a huge network of investments that critics say is bound to be in Beijing which creates geopolitical and financial leverage.

Payne said two documents signed in 2018 and 2019 respectively – memorandum of understanding and framework agreement – were among four that he would tear up under the new powers.

“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 announcement comes at a time of deterioration in relations between Beijing and Canberra, with both governments loggerheads over trade and competing for influence in the Pacific.

Australia has already upset China by calling for an independent probe into the origin of the coronavirus pandemic, which emerged in the Chinese city of Wuhan, and its latest move is likely to heighten tensions further.

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

Under the Australian constitution, the federal government is responsible for foreign affairs and defense. States usually provide services like health and education but in fact there is often overlap.

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

The new legislation applies to publicly funded organizations but does not include commercial deals.

Canberra has already taken steps to limit China’s influence in the country, including by banning telecommunications giant Huawei from building Australia’s 5G network and tightening foreign investment laws for corporations.

Payne said he would “continue to consider foreign arrangements” but expected the “vast majority” would not be affected.

However, the presence of the Chinese government-supported Confucius Institutions at Australian public universities is in doubt, amid continued criticism that they promote the Communist Party’s self-serving version of Chinese culture and history.

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