Victoria’s Belt and Road agreement with China is an important asset

Victorian Premier Daniel Andrews meeting with Chinese foreign minister Wang Yi in Melbourne in 2017. Picture: Supplied

Most Australians look at the disturbing events in the US and are thankful that is not happening here. But already our dollar is rising in response, and we have a deep stake in what is taking place in the land of stars and stripes.

Australia is becoming more and more dependent on the US for its defence in a world that is much less secure than it was a decade ago, partly because of the increased assertiveness and military power of China.

Unfortunately our security dependence on the US has moved us further away from our main trading partner, China. We are ignoring superior Chinese telecommunications systems (think Huawei). to maintain security compatibility with US.

In the words of former Defence Secretary Dennis Richardson Australia needs to find common ground with China May 13.

We need to be allies with US but friends with China, but that is not happening on a national level.

Thanks to foolish foreign policy by the Rudd, Abbott, and Turnbull ministries, friendship with China has been on steady decline.

And sadly, although Australia was perfectly justified in calling for an inquiry into the origins of COVID-19, that decline has accelerated under Morrison.

We need to keep a strong relationship with the US despite the turmoil, but we also need to be in much closer contact with our main trading partner.

In this context one of our great national assets is the trade contact one of our states, Victoria, has maintained with China via membership of the Belt and Road initiative.

I can’t emphasise too strongly that Australian foreign policy must be established by the national government in Canberra. From time to time it will make mistakes, but it’s not the role of the states to take over that role. And in that context Victorian treasurer Tim Pallas was wrong to inflame the current foreign policy tensions by criticising the Prime Minister over an action he was entitled to take.

Road to Spring Street

But while the federal government must be in charge of foreign relations, state governments have always been very active in promoting trade not with just with China. Western Australia and Queensland are very active in promoting their minerals and South Australia promotes its wine exports to China.

Victoria has a much deeper dependence on China than the mineral and wine exporting states. Our second largest state gains its prosperity from Chinese students, tourism, property investment, agricultural exports, and a raft of other China-related activities.

It is complete nonsense to suggest it somehow via Belt and Road, China is going to take over key parts of Victorian infrastructure in some high debt deal.

While Belt and Road is about linking China with Europe its also about trade- enhancing relationships. We don’t have to deal but knowledge of what is on the table of our major trading partner can be very valuable. .

Back in 2017-18 relations between Australia and China were already on the on the decline and a number of Department of Foreign Affairs officials welcomed the Victorian initiative because nations who depend on each other for trade (and China does depend on Australia) need to have dialogue.

Around 2017-18 few imagined the current deterioration in relationships between our defence partner the US and China or that there would be a technology dispute between China and US that, at least in telecommunications, we will be sucked into.

China is opening up large numbers of new laboratories to thrust Chinese technology forward over a wide variety of activities.

As a major trading partner we need to understand many of these developments. Unfortunately most the trade relationships we have with China are via each of our states.

From the outside it would seem that the current US turmoil makes Joe Biden highly likely to be the next US president and that might improve US- China relations. But anti-China sentiment in the US is running high and President Trump may try to tap it to calm the current internal turmoil.

And the fact that Biden wants to follow California and ban independent contracting and attack small businesses puts a huge lead weight in his saddle bag. We are dealing with a very different China to the one that existed say five to 10 years ago. China is becoming more and more belligerent and is exercising its muscle over a wide range of regional issues. It’s a totalitarian regime and, like almost all such regimes, human rights, as we know them, take second place.

But given the US turmoil where human rights gave way to a form of democratic anarchy, China will promote its system in the region. In theory Australia can say that because we oppose China’s human rights and territorial ambitions, we will not trade with the Middle Kingdom and cop the consequent lower standard of living including lower social services. But, wisely, we chose to trade with China over wide areas.

Given we chose to ignore human rights issues in the export of minerals its illogical to raise it in other trade issues.

Given that relations between Beijing and Canberra have broken down then trade contacts that the states have developed with our largest trading partner, including Belt and Road are important national assets. I do not expect that everyone will agree with that view. That’s the wonderful part of living in a democracy.