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Bilateral ties with China suffer another setback as Australia cancels Belt and Road (BRI) agreement

Wed, 21 Apr 2021 | Reading Time: 2 minutes

Ever since Australia had publicly questioned China on the origin of Covid 19 and its responsibility in creating the pandemic affecting the whole world, the bilateral ties have taken a hit. China tried to bully its way by initiating a trade war with Australia in response and imposing sanctions on various Australian products.

Australian Foreign Minister Ms Marise Payne today announced that the Australian Government is revoking a state government’s deal to join China’s Belt and Road Initiative, saying it was against the country’s national interest. This move is widely seen as an indicator of further increase in tensions between Canberra and Beijing. The Scott Morrison cabinet scrapped the agreement signed between state government of Victoria and National Development & Reforms Commission of China in October 2018, under the new foreign veto laws. The two documents signed in 2018 & 2019 respectively, a memorandum of understanding and framework agreement, under Belt and Road Initiative of China in Victoria state for a vast network of investments that critics say is cover for Beijing creating geopolitical and financial leverage. The Foreign Minister said, “I consider these four arrangements to be inconsistent with Australia’s foreign policy or adverse to our foreign relations,” in a statement.

Australia has already taken steps to limit China’s influence in the country, including by banning controversial telecoms giant Huawei from building Australia’s 5G network and tightening foreign investment laws for corporations. BRI, a pet project of Chinese Premier Xi Jinping aims to connect Asia with Europe and Africa though maritime and land routes which would give tremendous advantage to China by creating new trade routes. China has been taking a number of steps like imposing trade restrictions, anti dumping duties etc against Australia to inflict economic burden on the island continent.

The strain in Sino- Australian relations have manifested in many ways, an important one being the struggle for supremacy in Indo Pacific with Australia pushing the Quad and increased cooperation with member countries like USA, Japan and India. Interactions between Australian and Indian governments have grown and diversified over past one year including joint military exercises in Indian Ocean. Australia’s High Commissioner to India, Barry O’Farrell, launched the Australia-India Indo-Pacific Oceans Initiative Partnership (AIIPOIP) grant program to help support a free, open and prosperous Indo-Pacific underpinned by the rule of law and respect for sovereignty.

Australia-India Comprehensive and Strategic Partnership Agreement was a step in cementing the strategic partnership and AIIPOIP is an outcome of the Australia-India Joint Declaration on a Shared Vision for Maritime Cooperation in the Indo-Pacific, signed by Australia’s Foreign Minister Ms Marise Payne and India’s External Affairs Minister Dr S Jaishankar in June 2020.