China's belt and road initiative: what is it and why is Victoria under fire for its involvement?
Victoria has come under fire from federal Coalition MPs over its agreement under China’s belt and road initiative, but what does it mean for Victoria and Australia’s foreign policy towards China?
What is the belt and road initiative?
It’s the Chinese government’s estimated $1.5tn foreign and economic policy, announced in 2013, to establish maritime trade routes across the globe and invest in infrastructure projects in dozens of countries. The projects include pipelines, ports, railways and other major infrastructure projects.
Last year, Chinese media reported 170 memoranda of understanding had been signed with 125 countries.
Why did Victoria sign an agreement with China?
In 2018, premier Daniel Andrews signed a memorandum of understanding with China’s national development and reform commission to work together on belt and road initiatives.
At the time, Andrews said the agreement was aimed at his massive state infrastructure program.
“With the biggest infrastructure program in our state’s history under way, we have the design and delivery skills China is looking for, meaning more jobs and more trade and investment for Victorians,” he said.
“In four years we have more than tripled Victoria’s share of Chinese investment in Australia and nearly doubled our exports to China. We said we’d reboot our relationship with China and we’re getting it done.”
This was followed by a framework that established a working group, with an aim to get a roadmap on the partnership opportunities between China and Victoria agreed upon by the middle of 2020. So far, no roadmap has been released.
The framework reveals the partnership is looking to go beyond Chinese investment in infrastructure, including potential partnerships on biotechnology, agriculture, food, cosmetics, and a wide variety of industries.
What does the agreement force Victoria to do?
Nothing. It is not a legally-binding agreement, but so far the Victorian government is not backing away from it.
Victoria’s treasurer, Tim Pallas, told a parliamentary inquiry this month that the state would “absolutely not” reconsider its belt and road agreement, and accused the federal government of “vilifying” China over its push for an international inquiry into the Covid-19 pandemic.
The federal government has not signed a similar agreement, instead stating that BRI projects will be assessed on a case-by-case basis, rather than signing an overarching MoU or agreeing to any roadmap like Victoria.
Why are Coalition MPs so concerned about it?
Western countries, particularly the United States, have expressed scepticism about China’s motives underlying the BRI.
“An agenda is probably the best way to describe it,” the then prime minister, Malcolm Turnbull, said when asked why the federal government had delayed signing on in 2017.
“We obviously welcome Chinese investment that meets our foreign investment guidelines but we’d prefer to focus on specific projects and investments rather than engaging in generalities.”
The home affairs minister, Peter Dutton, was one of several Coalition members, including senators James Paterson and Matt Canavan, who criticised Victoria for making the deal.
Dutton described BRI as “a propaganda initiative from China” that brings an “enormous amount of foreign interference”.
“Victoria needs to explain why it is the only state in the country that has entered into this agreement,” he said.
Paterson accused Victoria of undermining the federal government’s response to China in the Covid-19 crisis.
On Sunday the prime minister, Scott Morrison, said Victoria was stepping into federal government policy territory.
“We didn’t support that decision at the time they made [the agreement]. And national interest issues on foreign affairs are determined by the federal government, and I respect their jurisdiction when it comes to the issues they’re responsible for and it’s always been the usual practice for states to respect and recognise the role of the federal government in setting foreign policy.
“And I think that’s always been a good practice.”
The Liberal opposition in Victoria has questioned why the agreement was not able to protect Victorian farmers from the 80% tariff placed on Australian barley by the Chinese government this month.
Could it lead to Chinese telecommunications infrastructure in Australia?
No more than is already here in the 4G networks that use Huawei today.
The US secretary of state, Mike Pompeo, told the Sky News Outsiders program on Sunday that communication channels could be severed if Victoria allowed China to fund telecommunications infrastructure in Australia.
He said the US would “not take any risk to our telecommunications infrastructure, any risk to the national security elements of what we need to do with our Five Eyes partners”.
“We’re going to protect and preserve the security of those institutions, so I don’t know the nature of those projects precisely, but to the extent they have an adverse impact on our ability to protect telecommunications from our private citizens, or security networks for our defence and intelligence communities, we will simply disconnect, we will simply separate,” he said.
The US ambassador to Australia, Arthur Culvahouse, had to backtrack on the comments on Sunday, after it was pointed out that telecommunications projects in Australia are the responsibility of the federal government.
In addition to Victoria stating it has not and would not enter an agreement with China over a telecommunications project, federal legislation passed in 2018 giving the federal government veto power over telecommunications infrastructure partners effectively bans Chinese companies such as Huawei and ZTE from working on 5G and other similar projects in the future.