Australia can now veto projects between foreign governments and its states and territories, thwarting the hopes of China’s BRI.
Prime Minister Scott Morrison has new powers to veto or abolish deals state governments make with foreign powers under laws that could thwart the China Belt and Road Initiative in Australia and worsen tensions between trading partners.
Laws passed by Parliament on Tuesday will give the Foreign Minister the ability to end new and already signed agreements between governments overseas and Australia’s eight states and territories, as well as with bodies such as local authorities and universities.
Morrison’s government will be able to block or reduce foreign participation in a wide range of sectors such as infrastructure, trade cooperation, tourism, cultural collaboration, science, health and education, including university research partnerships. One of the first goals will likely be an agreement that the Victoria state government signed in 2018 to join the infrastructure building BRI, signed by President Xi Jinping.
The laws could further worsen ties between Australia and its biggest trading partner, which have been in free fall since April, when the Prime Minister called for an independent inquiry into the origins of the coronavirus. Beijing has since inflicted a series of trade retaliations, including imposing crippling tariffs on Australian barley and wine while blocking coal shipments.
Relations hit a new low last week when a Chinese diplomat tweeted an image claiming to show an Australian soldier holding a knife to the throat of an Afghan child. After Morrison asked for an apology for the “disgusting” post, a senior Chinese foreign ministry official rejected the request, wondering if the Australian leader “didn’t have a sense of right and wrong”.
A spokesman for the Chinese Foreign Ministry on Tuesday evening urged Canberra to adopt “an objective and logical view of the Belt and Road initiative and to refrain from creating obstacles that prevent normal communication between China and Australia.
Victoria Prime Minister Daniel Andrews told reporters last week his government was not considering withdrawing from its BIS deal due to deteriorating ties, the Australian Associated Press reported.
China’s cooperation with Victoria on the BRI has brought benefits to both sides, Chinese Foreign Ministry spokesman Zhao Lijian said in August. “Australia should have an objective view of this cooperation and the BRI, and not create obstacles to China-Australia cooperation.”
Beyond the BRI deal signed by Victoria, which aims to increase Chinese participation in new infrastructure projects, the law could allow the federal government to review and rescind memoranda of understanding between Beijing and governments from Western Australia, South Australia and Tasmania in sectors ranging from investment, scientific cooperation and access to Antarctica.
States and territories have at least 130 agreements in 30 countries that could be affected by the new law, according to Morrison. The law will establish a public register to ensure the transparency of the decisions of the Minister of Foreign Affairs and the states and territories will have three months to take stock of their existing agreements.
Partnerships between Australian universities and Beijing-sponsored organizations could be abandoned. Intelligence circles are increasingly concerned about China’s influence in universities and a program whereby academics cede intellectual property rights to their work in exchange for research grants, the Australian newspaper reported. in April.
By law, Morrison will not be able to abandon agreements between state governments and commercial enterprises or state-owned enterprises. This means that the lease of a strategic port in Darwin, used by the US military, to a Chinese company by the government of the Northern Territory in 2015 could not be canceled.
It is the latest government initiative to protect national interests. Morrison also plans to strengthen the screening of foreign investment, regardless of the size of the transaction, for sectors such as telecommunications, energy and technology.