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AUSTRALIA: Victoria’s Belt and Road deal with China raises concerns

Victoria’s Belt and Road deal with China raises concerns

MAY 30, 2020 8:18AM
China hits back at Australia with crippling trade tariffs as tensions heat up over Coronavirus investigation.


Victoria’s secretive agreement with China — part of its controversial Belt and Road Initiative — has come under scrutiny this week after the US threatened to “disconnect” from Australia if the deal threatened telecommunications.

Victoria’s partnership with China has always been controversial but it is now drawing more critics as concerns grow about China’s actions in the wake of the coronavirus pandemic.

China has hit out at Australia, placing a tariff of almost 80 per cent on its barley and blocking beef imports from four abattoirs, after Australia called for an independent inquiry into the origins of COVID-19.

The US has also raised concerns about the possible ramifications of working too closely with China.

On Sunday, US Secretary of State Mike Pompeo created headlines when he said the US wouldn’t hesitate to “disconnect” from Australia if Victoria’s involvement in China’s Belt and Road Initiative (BRI) threatened its telecommunications security.

While US Ambassador to Australia Arthur Culvahouse quickly issued a statement to “set the record straight”, noting that Mr Pompeo had not seen the agreement, China quickly seized on the comments and said Australia should be “well prepared to be abandoned at any time” by the US.

Victoria was expected to agree to a “co-operation road map” before June to further cement its relationship with China, after a memorandum of understanding was first signed in 2018.

However, Premier Daniel Andrews suggested this week the finalisation of the agreement could be pushed back.

“It’s fair to say people’s focus was on a global pandemic rather than necessarily some of those issues,” he told reporters on Wednesday.

“But when we’re in a position to make further announcements, we will.”

Victoria’s decision to pursue the deal flies in the face of the Australian Government’s stance not to sign up to the BRI.

One Nation leader Pauline Hanson is just one critic who believes Victoria should not be pursing the deal.

“People need to steer clear of China … Daniel Andrews I’ll tell you now you’re a bloody idiot if you head down this path,” she told Sky News.

Senator Hanson pointed to Beijing’s actions to seize a port in Sri Lanka after the country struggled to pay back a loan for the project.

“You have to look at what China has done to other countries,” Ms Hanson said.

“They want countries to be beholden to them.”

So what exactly has Victoria signed up to? Here’s what you need to know.


China’s Belt and Road Initiative is a huge trillion-dollar project that involves co-funding hundreds of infrastructure projects around the world, mostly built by China.

The ambitious project was expected to see China form partnerships with governments in 70 or more countries to build needed infrastructure, but also to help it to develop relationships, secure supplies of needed resources and widen its influence.

More recently there are claims the initiative is a “debt trap” and critics question what China really wants out of program.

The New York Times looked at the example of Sri Lanka’s Hambantota port.

China gave the government a loan to build the port despite feasibility studies showing it was not economically viable.

In order to obtain its loan, Sri Lanka was forced to accept Beijing’s preferred company as the port’s builder, according to a United States Embassy cable leaked to WikiLeaks.

After the port was built, it was not well used and the government could not keep up its loan repayments.

Rather than agreeing to write down the debt, China negotiated for the port and 15,000 acres of land around it to be leased to a Chinese company for 99 years in December 2017.

Although the lease doesn’t allow military activity at the port without Sri Lanka’s invitation, fears have been raised because the port is located just a few hundred miles off the shores of rival India and is also part of an important commercial and military waterway.

“The only way to justify the investment in Hambantota is from a national security standpoint — that they will bring the People’s Liberation Army in,” Shivshankar Menon, who was India’s foreign secretary and then its national security adviser when the Hambantota port was being built, told the New York Times.


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