The Chronicle

Feds will not bow to China ‘threats’


TREASURER Josh Frydenberg says the government will not bow down to threats after Beijing’s media mouthpiece warned Australia was facing “serious consequenc­es” for tearing up Victoria’s Belt and Road deal.

The message from Chinese state-owned media outlet the Global Times comes after Foreign Affairs Minister Marise Payne on Wednesday night announced that two Belt and Road agreements would be axed under new laws.

The Morrison government, which scrapped the deals because they did not meet the national interest test, has been accused of firing a major shot to provoke China in a move that could “lead up to a potential trade conflict”.

Mr Frydenberg said he wanted Australia to continue having a productive relationsh­ip with its largest trading partner.

“But at the same time we will be clear and consistent with respect to our national interest,” Mr Frydenberg said.

“Whether it is around human rights, foreign investment, or other national security-related issues.”

On the issue of Australia’s iron ore exports to China, Mr Frydenberg said the trade was mutually beneficial.

“I’m confident that relationsh­ip, despite the challenges we have today, will continue,” he said.

But Chinese scholar Chen Hong — who had his Australian visa cancelled after an intelligen­ce investigat­ion — told the Global Times that Australian officials were aware of the consequenc­es of scrapping the deals but did so anyway.

“That clearly shows Australia’s intention to further escalate tensions with China rather than de-escalate,” Mr Chen said.

The new powers, which passed parliament in December, have been criticised as targeting China.

But Senator Payne has strongly rejected the claims, adding Australia has also binned agreements with Iran and Syria.

Chinese Academy of Internatio­nal Trade and Economic Co-operation research fellow Song Wei told the Global Times the move would “worsen the China-Australia trade relationsh­ip” and would have a “negative impact” on the Victorian economy.

University of Sydney professor Hans Hendrischk­e said the commercial impact was minimal.

“These were standard trade and investment promotion agreements,” he said.

“The Chinese National Developmen­t and Reform Commission is a planning and coordinati­ng body without executive powers.”

He said the cancellati­on of the agreements now brought Victoria in line with other states.

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