China vows to respond to Australia’s cancelled Belt and Road Initiative

The latest stoush kicked off on Wednesday night, when Foreign Affairs Minister Marise Payne announced that two Belt and Road agreements would be axed under new laws.

The deal was cancelled after the Morrison government claimed the agreements did not meet the national interest test.

Ms Payne said in a statement she found the agreements to be “inconsistent with Australia’s foreign policy or adverse to our foreign relations”.

“I will continue to consider foreign arrangements notified under the Scheme,” the statement reads.

“I expect the overwhelming majority of them to remain unaffected. I look forward to ongoing collaboration with states, territories, universities and local governments in implementing the Foreign Arrangements Scheme.”

What is the Belt and Road Initiative?

The Belt and Road Initiative (BRI) evolved out of the 2013 One Belt One Road plan, which was devised by China as a means of establishing a large, global network of trade routes with many nations.

Victorian Premier Daniel Andrews attended a summit on the matter in Beijing in 2017, with the state inking a Memorandum of Understanding (MOU) with China in October 2018 to join dozens of other nations in the BRI.

China’s BRI involves scores of broad-ranging international infrastructure projects funded by Beijing in what President Xi Jinping claims is a win-win for all parties.

China hits back

Unsurprisingly, the move the cancel the deal angered Beijing, with a Chinese Embassy spokesman warning in a statement it could further derail already soured relations between the two nations.

“We express our 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,” the spokesman said.

“This is another unreasonable and provocative move taken by the Australian side against China.

“It further shows that the Australian government has no sincerity in improving China-Australia relations.

“It is bound to bring further damage to bilateral relations, and will only end up hurting itself.”

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And last night, China’s government mouthpiece The Global Times kicked the criticism up a notch, slamming the decision as “an unreasonable and deliberate provocation against China” and vowing retaliation – including “potentially crippling countermeasures” – in a brutal op-ed.

“Clearly, Canberra is increasingly unhinged and in way over its head by taking such a suicidal attack on not just China but also its own economic interests,” the piece reads.

“Since the cancellation of the BRI deals, speculation has been rife that Canberra may soon suffer from the wrath of its largest trading partner.

“Given the viciousness and seriousness of the move, we won’t be surprised if China takes forceful countermeasures to inflict serious pain on Australia.”

The article also took aim at Australia by describing it as “nothing more than a tiny sidekick of the US”.

“With the cancellation of the BRI agreements, Canberra once again laid bare that it has no intention of easing tensions with China; instead, it is further seeking to poison bilateral co-operation with its largest trading partner,” it continues.

“That just adds to a long list of hostile actions taken by Australia, which was the first country in the world to ban Huawei’s 5G equipment and has shamelessly followed the US in every attempt to smear China over issues related to Hong Kong and Xinjiang, among others.”

It also outlined the actions already taken against Australian businesses, including “winemakers, farmers and seafood exporters” which “have already suffered due to the downward spiral in bilateral relations”.

It claimed that Australia’s move could also threaten China’s BRI agreements with other nations, which meant “countermeasures against Australia may be necessary to send an unmistakable signal that ill attempts to undermine win-win co-operation under the BRI won’t let go unpunished”.

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However, Professor Hans Hendrischke from the University of Sydney Business School said in a statement the cancellation of the trade and investment agreements were “in line with the current downgrading of diplomatic relations with China”.

“The commercial impact from cancelling the agreements is minimal as these were standard trade and investment promotion agreements that are routinely signed by corporate and government entities. The Chinese National Development and Reform Commission is a planning and co-ordinating body without executive powers,” he said.

“Legally, the cancellation of the agreements with China brings Victoria in line with other states, which don’t specifically refer to the Belt and Road Initiative in their dealings with Chinese counterparts.”