Australia says China-linked state deals cancelled on national interest grounds

Australia has said that a decision to cancel two deals between Victoria state and China on the Belt and Road Initiative (BRI) was about ensuring consistency in foreign relations and was not aimed at any country.

On Friday, China has dubbed Australia's decision to scrap the controversial BRI agreement with Beijing as "unreasonable and provocative", warning that this would further "damage to bilateral relations". Foreign Minister Marise Payne had vetoed two agreements signed by Victoria state as "provocative" and said it would further damage ties with Australia.

The rebuke comes hours after the Australian government announced the cancellation of the BRI agreement with China, saying it goes against its national interest.

"This scheme is very focussed on Australia's national interest. It is about ensuring consistency of our foreign relations across Australia, and it is most certainly not aimed at any one country. And in fact, with the 1000 notifications that we received from the states and territories, arrangements exist with so many countries," Payne said in an interview with ABC radio according to the official transcript on Thursday.

According to Al Jazeera, the minister said that she has received a thousand notifications from Australian states about deals they have with multiple foreign governments, under a new process that gives her veto over such arrangements.

On the subject of whether China was given a heads-up, Payne responded that Beijing authorities were given advanced notice.

"So, we have made advice available in both Canberra and in Beijing. And so that information was provided, yes, she said and added that Australia was committed to engaging with China, and was "asking all governments around the world to respect our government's decision-making authority".

In an official order issued on Wednesday, the Scott Morrison government scrapped the agreement signed between the state government of Victoria and the National Development and Reform Commission of China, which was signed on October 8, 2018. It also cancelled a framework agreement signed between the two sides on October 23, 2019.

Payne said that the BRI deal has been cancelled under the Commonwealth's new foreign veto laws. This scheme requires the federal government to cancel agreements that states, territories, local governments and universities enter into with an overseas government if they contradict the country's national interest, The Sydney Morning Herald reported.

Initiated in 2013, the BRI is Xi Jinping's grand plan to connect Asia with Africa and Europe via land and maritime trade networks to create new routes for China.

The Sydney Morning report said that the Morrison government and national security experts were concerned that China was using the agreement with Victoria as a propaganda win to claim the that state government had broken ranks with Australia's China policy.

Moreover, they are also worried that China was using the BRI to load up poorer countries with debt and reduce Australia's influence in the region.

Sino-Australian relations have been in a downward spiral since April last year when Canberra infuriated Beijing by proposing an independent international inquiry into the origins of the Covid-19 pandemic.

Canberra has been locked in an ongoing trade war with Beijing for several months, which has seen China slapping sanctions on various Australian products.

Beijing has slapped several restrictions amounting to billions of dollars of Australian exports, including beef, barley and wine, citing dumping and other trade violations that analysts widely view as pretexts to inflict economic retaliation.

China has unofficially banned Australian imports of coal, sugar, barley, lobsters, wine, copper and log timber since November 2020. It has also imposed anti-dumping duties on barley.

( With inputs from ANI )