Australia-China Relations Get Worse With Canberra Cancelling Road And Belt Initiative Deals

The already strained relations between Australia and China degraded further after Australia scrapped agreements linked to China’s Belt and Road initiative. This move has provoked anger from Beijing.

The Australian federal government made use of its new powers to cancel two deals that were inked between the state of Victoria and China previously. The government said that this decision of cancelling the agreement had been taken by it to safeguard the national interests of Australia.

The decision of the Australian government was described as “provocative” by the Chinese embassy in Australia. The action taken by the Australian government was “bound to bring further damage to bilateral relations, and will only end up hurting itself”, it said.

“It further shows that the Australian government has no sincerity in improving China-Australia relations,” a spokesperson for the embassy said in a statement.

This is the first occasion that the federal government has used its powers to rip off deals that had been struck with foreign countries by Australian states, local governments or public universities, using the laws, the federal government is allowed to cancel deals and agreements that are deemed to be a threat to the country’s national interest.

Agreements with Iran and Syria were also scrapped by the Australian Foreign Minister Marise Payne in addition to the deals with China. The deals with Iran were a memorandum of understanding struck by Victoria’s education department which was signed in 2004 while the state had also signed a scientific cooperation agreement signed with Syria in 1999 which was scrapped.

The four agreements were “inconsistent with Australia’s foreign policy or adverse to our foreign relations”, said Senator Payne.

The government’s decision was supported by her while speaking to the Australian Broadcasting Corporation. She did not expect China to retaliate, she added.

“I think Australia is acting in our national interest, we are very careful and very considered in that approach,” she told the AM radio programme.

The then the federal government, as well as then-US Secretary of State Mike Pompeo had criticised the decision of the Victoria state to sign up to China’s Belt and Road initiative through two agreements in 2018 and 2019. The Belt and Road initiative of China is a sweeping infrastructure project which aims to expand global trade links and trains, roads, and ports projects have been funded in many countries. However that has left some countries in huge debts.

The United States has been particularly critical of China’s so-called “debt diplomacy” as it views this Belt and Road initiative as an effort by the China’s President Xi Jinping to exert geopolitical influence.

This decision of Australia to sever its ties with China’s Belt and Road initiative comes amid tensions between the two countries on diplomatic levels as well as trade.

Prior to the Covid-19 pandemic, China was the biggest source of overseas university students in Australia while Beijing still remains the largest trading partner of Canberra. However in recent years, the relations between the two countries have worsened which spilled on to the diplomatic relations and trade.

(Adapted from

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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