Tearing up agreements: Australia, China and the Belt and Road Initiative

By Binoy Kampmark

Wednesday April 28, 2021

Deputy Head of Mission of the Chinese Embassy in Australia Wang Xining
Deputy Head of Mission of the Chinese Embassy in Australia Wang Xining at the National Press Club in Canberra, Wednesday, April 21, 2021. (AAP Image/Lukas Coch)

A persistent theme in Australia’s Morrison government has been to assume that electors are mugs and unaware of its schemes. And just to keep that theme going, the specific tearing up of agreements made between China and the state of Victoria was supposedly not meant as a slight against Beijing, writes Binoy Kampmark.

The nullification of the Belt and Road Initiative (BRI) agreements by Australian foreign affairs minister Marise Payne were deemed necessary actions: the agreements were contrary to the national interest, a term so rubbery it often lacks shape. In the words of the senator, the agreements were “inconsistent with Australia’s foreign policy or averse to our foreign relations”. Wise heads might well make use of such initiatives without due sycophancy but Canberra has made its bed in the field of US security as it soils economic relations with China.

On radio, the foreign affairs minister insisted with all seriousness that the measures had not been “aimed at any one country.” Australia remained “absolutely committed to our continuing engagement with China”. To even call the current state of affairs a form of engagement is a stretch of some magnitude. At best, Australia is disengaging with Beijing.

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The relevant legislation Payne resorted to is Australia’s Foreign Relations (State and Territory Arrangements) Act 2020, which requires states, territories, local governments and Australian public universities to inform the foreign affairs minister of any existing and proposed foreign arrangements. The act grants the minister powers to prohibit government entities from negotiating or entering into agreements with certain foreign entities that fall within the remit of the legislation. It also enables the declaration of invalidity, unenforceability, inoperability or variation or termination of such arrangements if they are deemed inconsistent with Australia’s foreign policies or arrangements that adversely affect Australia’s foreign relations.

Two other agreements, also made by the Victorian government with other countries, were also deemed to fall foul of the scheme: the memorandum of understanding between the Victorian Department of Education and Training with its relevant counterpart in Iran (2004) and the Protocol of Scientific Cooperation between the Syrian Ministry of Higher education and its Victorian equivalent (1999).

Payne was not, however, all into cancellations. Australia’s interest in fossil fuels remains a mania, so the Western Australian government would have been confident about its memorandum of understanding with Indonesia’s Ministry of Energy and Mineral Resources.

The Victorian premier, Daniel Andrews, never saw any problems with the BRI arrangements but the writing was already drying on the wall last year. “We have a relationship with China I think is very important,” he stated at the time. “What I support is Victorian jobs.” Never, he said, had there “been more Victorian made product sent to China, exported to China, sold to China today, than at any point in this state’s history.”

Too much of the agreements have also been made by critics. Both the memorandum of understanding and framework agreement made reference to promoting “practical cooperation” of Chinese firms in Victorian infrastructure reciprocally giving Victorian firms a foothold in “China and third party markets”. But they were never legally binding documents.

Andrews had, however, made himself a target. Officials in the Department of Foreign Affairs and Trade would have been more than irritated in being sidelined by the premier in the making of the second BRI agreement. DFAT never saw a draft of it and only got wind of the wording the day it was signed. According to a spokesperson, “Victoria advised the department of the framework agreement on the day it was signed and announced.”

The anti-Beijing, pro-US hands in the Australian Strategic Policy Institute have been noisily warning against the merits of Victoria’s BRI arrangements. Executive director Peter Jennings accused the premier last May of being “flagrantly reckless” in embarking on a policy that undermined “a bipartisan Australian foreign policy position”. Andrews had ignored “federal leadership in this area, which is mandated by the constitution.” The nightmare for Jennings: Chinese success in increasing dependency of developing states on Beijing and the prospect that Australian companies might be unwitting participants in the enterprise. The influence of the PRC would be thereby be expanded at the expense of Australia.

The statement from the Chinese embassy at Payne’s decisions expressed “strong displeasure and resolute opposition to the Australian Foreign Minister’s announcement on April 21 to cancel the Memorandum of Understanding on Cooperation within the Framework of the Belt and Road Initiative and the related Framework Agreement between the Chinese side and Government of Victoria.” In calling the decision “unreasonable and provocative”, the embassy warned that this was “bound to bring further damage to bilateral relations, and will only end up hurting” Australia.

Unfortunately for Australia, alternatives to the BRI system have been few and inadequate. The Blue Dot Network announced by the US, Australia and Japan in November 2019 was meant to be a countermeasure, with “aims to promote quality infrastructure investment that is open and inclusive, transparent, economically viable, environmentally and socially sustainable, and compliant with international standards, laws, and regulations.” But a closer look at the initiative shows it to be a mere certification scheme, with the incentive on others to provide private capital in conditions that satisfy “global trust standards”. Those standards are also questionable; three countries setting the rules is hardly “global” in nature.

It is precisely that sort of woolly-headedness that promoted former Asian Development Bank executive director Peter McCawley to observe that a road remains a road “whether it is built with US or Chinese money. At present, it seems that the Chinese are prepared to fund the construction of infrastructure in Asia, while the US is not.” Geopolitics on the cheap is rarely a recipe for success.


Federal government quashes Victoria’s belt and road deal with China

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