Foreign Affairs Minister Marise Payne scraps Victoria’s Belt and Road deal with China

Victoria’s controversial Belt and Road agreement with China has been axed under new federal powers, prompting fears of retaliation.

Foreign Affairs Minister Marise Payne has defended the axing of Victoria’s controversial Belt and Road agreement with China despite threats it will “further damage” the strained relationship.

Senator Payne on Wednesday night announced that four deals between the state government and foreign countries would be scrapped under new powers because they weren’t in the nation’s interest.

But Chinese officials have already lashed the move, saying it shows Australia had no sincerity to improve relations with its largest trading partner.

In a statement, the embassy in Canberra said the Belt and Road deal brought “tangible benefits” for both parties and was conducive to deepening economic and trade relations.

“This is another unreasonable and provocative move taken by the Australian side against China,” a spokesperson said in a statement.

“It is bound to bring further damage to bilateral relations and will only end up hurting itself.”

Marise Payne has thanked states and territories for reporting their deals with foreign entities. Picture: NCA NewsWire / Gary Ramage

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Senator Payne on Thursday said the new powers weren’t aimed at “any one country” and Australia would continue to emphasise its commitment to engaging with China.

“It is most certainly not intended to harm Australia’s relationships with any countries,” she told ABC AM.

“I hope that if there are any concerns they will be raised with the government.”

Senator Payne rejected the assertion that Australian producers should prepare for more retaliation from China – despite wine and barley producers being slapped with tariffs and customs issues with Australian seafood, coal and timber last year.

“Australia is operating in our national interests, we are very careful and very considered in that approach,” she said.

“It’s about ensuring we have a consistent approach to foreign policy.”

There are concerns about what the scrapping of the four deals will mean for Australia’s relationship with other countries. Picture: AAP Image/Lukas Coch

More than 1000 deals have been reported to the federal government so far.

But only two of Victoria’s Belt and Road documents, as well as two education agreements between the state and Iran and Syria, have been cancelled.

This comes after new laws to tear up agreements between foreign powers and states, territories, universities and local governments that don’t meet the national interest test were introduced in December 2020.

Senator Payne said she expected the overwhelming majority of deals to remain unaffected.

Former Labor leader Bill Shorten agreed the government had made the right decision.

“We wouldn’t have signed the arrangements either if we were in government,” Mr Shorten told Today.

“It’s important the Morrison government takes control of our relations with China.”