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'China's gateway': Daniel Andrews' Belt and Road pitch to Beijing

'China's gateway': Daniel Andrews' Belt and Road pitch to Beijing

Internal documents obtained under the freedom of information act show Mr Andrews pitching for money and expertise from Chinese state-owned companies in his trip to China in October last year, with a promise to "facilitate" their access to Victoria and "collaborate" on the state's biggest projects.

Victoria, he said, would become “China’s gateway to Australia”.

Daniel Andrews has defended his dealings with China.

Daniel Andrews has defended his dealings with China. EDDIE JIM

Among the projects the Premier listed were the uncosted but multibillion-dollar Suburban Rail Loop, the North East Link road project and the Airport Rail Link.

The details of Mr Andrews' pitch to China come amid deteriorating relations between Canberra and Beijing over trade, and as the Morrison government announced it would legislate to cancel any agreement between states and a foreign power deemed to challenge national security.

The $1 trillion Belt and Road Initiative is Chinese President Xi Jinping's signature policy to invest in infrastructure globally including roads, rail, pipelines and telecommunications systems. But western governments, including Australia and the United States, increasingly view it as a foreign policy and propaganda tool, as well as a potential debt trap for developing nations.

The federal Labor opposition also rejects the idea of Australia signing up to the Belt and Road Initiative, but Mr Andrews insisted again on Friday that he was committed to it and the relationship with China after signing a Memorandum of Understanding on the project in 2018.

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"I've got no change to the position I've outlined on many, many occasions. I think a strong relationship and a strong partnership with China is very, very important," he said.

The almost 80 pages of released documents include Mr Andrews' speech notes at an intimate "roundtable" meeting with the heads of Chinese corporations and government ministries at Beijing's Grand Hyatt hotel on October 22 last year. The trip was Mr Andrews' sixth to China as Premier.

Among the attendees at the dinner was Dr Lu Jianzhong, the president of the China Communication Construction International Company and the chairman of John Holland (a fully-owned CCCC subsidiary), which is a bidder on North East Link.

Earlier this year, CCCC was listed by the US departments of Commerce and Defence as part of China's "Military-Civil Fusion development strategy". It also appeared on a separate black list as having been involved in the construction of artificial islands in the South China Sea.

China “must not be allowed to use CCCC and other state-owned enterprises as weapons to impose an expansionist agenda,” US Secretary of State Mike Pompeo said at the time.

At the October 22 dinner, Mr Andrews told the executives and Chinese government representatives that he wanted Chinese companies to establish offices in Victoria and bid for projects. He wished to "convey Victoria's desire to collaborate with international partners" including "leading Chinese firms in attendance on major transport infrastructure projects".

Of the Suburban Rail Loop, he said: "We are currently seeking registrations of interest from organisations with the experience and capability to assist in the delivery of this mega project."

The project, Mr Andrews' largest and most popular infrastructure announcement at the 2018 state election, is estimated to cost at least $50 billion and is yet to be funded. Mr Andrews has previously said private investment would play a big role.

The Premier said the Belt and Road Initiative "highlights Victoria's desire to work collaboratively with China", that Chinese companies' "talents and capacity are critical to our success", and their "collective expertise and experience, particularly in recent projects of significant scale and complexity, align precisely with our current agenda".

Daniel Andrews visiting pandas during his 2015 China trip.

Daniel Andrews visiting pandas during his 2015 China trip. SUPPLIED

"You will find the Victorian market accessible, and my government will welcome your participation and do what it can to facilitate success," he said.

During the meetings, Mr Andrews told Chinese officials that his government was spending more on infrastructure than the Commonwealth was for the rest of the country.

The meeting with companies, including CCCC bidding on projects, prompted a probity warning to Mr Andrews with a request he not discuss specifics of the North East Link procurement process and that he have two Victorian officials by his side at all times to record discussions.

“It is recommended that you offer similar meetings with the relevant global heads of other constructors that are also in bid teams,” his department advised.

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The documents also reveal that Victoria last year put a detailed list of proposals to China for co-operation under the program, which were developed by a liaison group led by senior Labor MP Danny Pearson and the deputy consul general from China’s Melbourne Consulate, Jianhua Zeng.

The group, which Mr Andrews described in a letter to a senior Chinese official as “ensuring alignment on shared objectives”, last met earlier this year.

The documents also show other key priorities for Mr Andrews on the trip were establishing relationships with China's ministers for Science and Technology, Commerce and Culture and Tourism.

He was hoping to achieve smoother customs processes at the Chinese end to enable easier access for Victorian meat and dairy exporters, with a particular focus on infant formula. His pitch on Victorian red meat was to replace protein lost because of China's African Swine Fever outbreak.

COVID-19 and rising tensions at a national level have stalled Victoria’s Belt and Road progress this year. A “road map” of projects planned for release this year is yet to eventuate and a planned trip to Beijing in March by Mr Pearson, who was then Mr Andrew’s parliamentary secretary and is now a minister, was cancelled.

While federal governments and state governments across Australia have sought and welcomed Chinese investment in recent years, the Belt and Road program is regarded differently. Victoria is the only Australian signatory to the $US 1 trillion infrastructure program.

A NATO economic and security committee briefing on the Belt and Road in May linked the policy to China’s expansion of naval power. “There should be no mistake that elements of the BRI and China’s related foreign policies pose a challenge to Western values.” The counter view is that poor countries involved in the Belt and Road are getting infrastructure built that they could never have afforded on their own.

Prime Minister Scott Morrison and senior ministers such as Home Affairs Minister Peter Dutton have been critical of Victoria’s dealings with China on the Belt and Road, claiming it undercuts the role of the Department of Foreign Affairs and Trade.

Daniel Andrews giving a speech at the parallel sessions of the Belt and Road Forum in Beijing in 2017.

Daniel Andrews giving a speech at the parallel sessions of the Belt and Road Forum in Beijing in 2017. SANGHEE LIU

A spokesman for DFAT said the federal government was not consulted nor given the opportunity to comment on Victoria's signing of the Framework Agreement with China last October.

Victorian Treasurer Tim Pallas rebuked Mr Morrison earlier this year for “vilifying” China after he called for a probe into China’s handling of the initial coronavirus outbreak.

Rory Medcalf, head of the national security college at the Australian National University, said on Friday that the Belt and Road Initiative was so important to China’s quest for global influence that it was broadly beyond the ability of state and local governments “to play in that space without clear consultation at a national level”.

Professor Medcalf said although the language in Victoria’s agreements with China was innocuous, the apparent unquestioning involvement of first world governments such as New Zealand or Victoria made it harder for poorer nations to protect their interests.

China was likely to continue to invest in projects in Australia without governments’ signing up to the Belt and Road Initiative, he said.

But the former secretary of Australia’s defence department, Paul Barratt, said Australia should have been a signatory to the Belt and Road when it was first proposed by China in 2013 because it was our largest trading partner.

"It’s not our enemy. The agreement is non-committal and you just examine issues case by case,” said Mr Barratt, now an adjunct professor at the University of New England.

The documents also give an insight into the negotiations over the wording of the Framework Agreement signed by Mr Andrews last October, including China’s insistence it specifically mention co-operation on aged care.

Life expectancy in China has increased markedly with improved living standards, making aged care a priority for the world’s most populous nation.

Despite disclosing some material related to Victoria’s BRI interactions with China, Mr Andrews’ department chose to withhold a small amount of documents and blacked out key passages from other documents.

A letter from Mr Ning was exempted from release under FOI on the basis it would disclose confidential information from a foreign government. Six other documents were redacted in order to protect recommendations, advice or opinions expressed to the Premier by his advisers.

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