China said on Thursday that Australia’s abrupt scrapping of the Enterprise Belt and Road deal risks “serious damage” to contacts and warns of retaliatory action, but Canberra insisted it would not be bullied.
The federal government withdrew the deal with the state of Victoria late Wednesday in a move justified by the defense minister as needed to prevent Australia from carrying out a massive “used for propaganda” infrastructure plan.
Australia reversed the state’s decision to join the Belt and Road Initiative (BRI) – the forerunner of President Xi Jinping’s geostrategic vision for the Asia-Pacific region – by saying the agreement was inconsistent with Australia’s foreign policy.
As nosedive relations – following spitting over the origin of the coronavirus and blocking Canberra of Chinese telecommunication giant Huawei – Defense Minister Peter Dutton said Canberra was “worried” about local governments entering into such agreements with Beijing.
“We can’t allow these kind of compacts … to pop up because they’re used for propaganda reasons and we’re not going to allow that to happen,” he told local radio.
Dutton said the government’s problem was not with the Chinese people but rather “the values or virtues or attitude of the Communist Party of China”.
Australia enacted new powers last year – widely regarded as targeting China – that allow it to remove any agreements between state and foreign authorities deemed to threaten the national interest.
Canberra’s first target was the BRI, an extensive network of investments that critics say supplies to Beijing to create geopolitical and financial leverage.
Prime Minister Scott Morrison said the decision was “followed” on his government’s pledge to ensure Australia has a consistent foreign policy that strives for a “balance-seeking world for freedom”.
The schism between Australia and its largest export market widened on Thursday as Beijing rode in the sudden cancellation and warned it would damage trust between the two countries.
The move “has poisoned mutual trust … and seriously damaged relations between China and Australia”, foreign ministry spokesman Wang Wenbin said in a briefing in Beijing.
“China reserves the right to take further action in response to this.”
Earlier, Dutton said it would be “very disappointing” if China took revenge but returned that Australia “would not be bullied by anyone”.
“We’re going to stand up for what we believe in and that’s exactly what we’ve done here,” he said.
The BRI is the demonstration of Xi’s vision for Asia, a lattice of ports, train tracks, economic zones and other infrastructure investments to tie the continent and beyond closer to China’s commercial orbit.
It was unclear whether Victoria’s state deal had “any projects in progress or promised any investments”, Peter Cai, an Australia-China relations expert at the Lowy Institute, told AFP.
But Canberra’s bold move is an indicator “of how foreign relations cheating or political instability can affect China’s global infrastructure push”, he said.
China has already slapped tariffs on more than a dozen Australian industries, including wine, barley and coal, in what many consider to be a sanction for Canberra’s increasingly assertive stance against its biggest trading partner.
Australia upset China by calling for an independent probe into the origins of the coronavirus pandemic, banning telecommunications giant Huawei from building Australia’s 5G network and tightening foreign investment laws for corporations.
Other agreements between foreign powers and local governments are still under consideration, and Canberra could target the Chinese government-supported Confucius Institutions presence at Australian public universities.
Critics say the organizations, which have been the subject of controversy on some campuses, promote the Communist Party’s self-serving version of Chinese culture and history.
(With the exception of the headline, this story has not been edited by NDTV staff and is published from syndicated feed.)