China-Australia Relationship In For Another Blow

Ties between Australia and its biggest trading partner China are set to take another dive. Australia has canceled two deals struck by the state of Victoria to cooperate on China’s Belt and Road Initiative.

Australia’s government used new foreign veto laws to cancel Victoria’s agreement with China negotiated in 2018 and 2019. Australian foreign minister Marise Payne said that the deals were inconsistent with Australia’s foreign policy. Victoria’s Premier Daniel Andrews has been locked in an ongoing feud with Canberra over the state’s decision to join the Belt and Road Initiative.

The brainchild of Chinese President Xi Jinping is a global infrastructure initiative worth up to $1.5 trillion.

There were contracts that were signed in 2018 and 2019. The Australian foreign minister said that she was going to scrap all the agreements to do with the Belts and Road Initiative. Basically Canberra last year introduced new laws widely targeting China. The law allows Canberra to scrap any agreements between foreign countries that are deemed to threaten the country’s national interest.

These agreements were to do with a number of investments. A huge number of initiatives that China was going to invest in within Victoria included railway projects. Other projects included highways stretching right across from Asia all the way to Europe. Now that has been scrapped in a huge blow to this initiative. However, not much blowback yet has been seen from the Victorian government. They said that the ultimate decision lies with the Commonwealth government and they’ve decided to tear this apart at this stage.

This is another blow to the already poor ties between Australia and China. It has been escalating tensions between the two countries over the last few months. It particularly escalated when Australia dipped into go-ahead with the independent review into the coronavirus pandemic. So tensions between the two countries have been high particularly also considering that Australia has had a lot of tariffs and bans. Between Australia and China, a lot of issues have arisen with exports from Australia to China in particular barley and wheat. China has stopped a lot of things coming into their country due to these escalating tensions.

The recent scrapping of the deals is just going to add to the tensions between the two countries. The decision could have implications that would be long-term.

China of course will retaliate or be upset with this decision, in particular. There are some expectations from the analysts that there could be extra tariffs put in place between the two countries. China is a huge part of Australia’s economy and makes up a huge part of the country’s export industry. So if they were to be any more implementations on Australia’s exports then that could be a huge blow to the country’s industry.