Belt and Road Initiative deal drives wedge in high-stakes playoff

China is splitting Australia’s state and federal governments by having Victoria sign on to its BRI, a defence expert warns.

Victorian Premier Daniel Andrews. Picture: Mark Stewart

China is splitting Australia’s state and federal governments by ­hav­ing Victorian Premier Daniel Andrews sign on to the Belt and Road Initiative, a defence expert warns.

Mr Andrews signed a framework agreement this week with China’s National Development and Reform Commission that will focus on infrastructure, innovation and trade development and market access.

The agreement followed the signing of a memorandum of understanding last year.

Australian Strategic Policy Instit­ute director Michael Shoebridge said by signing with Victoria the Chinese Communist Party leadership had gone around the federal government, which has said it would consider projects on a case-by-case basis.

“Premier Andrews’s decisions on the BRI are being used by the Chinese Communist Party leadership to create a split between the federal level of government and the states on Xi Jinping’s signature Belt and Road Initiative,” he said.

The federal government’s ­responsibilities in foreign affairs, defence and national security equipped the national level with agencies and insights that Victoria didn’t have, Mr Shoebridge said.

“Those constitutional responsibilities weigh heavily when considering issues like the BRI.”

The Department of Foreign Affairs­ and Trade said the federal government had not signed up to the BRI. “Matters of international relations are the responsibility of the federal government, including the signing of agreements with broader policy implications.”

As part of the agreement, a joint working group to promote the initiative­ will be co-chaired by Mr Andrews and NDRC vice-chairman Ning Jizhe and will meet on a six-monthly basis. Under the deal, the NDRC will “encourage” Chin­ese infrastructure firms to establish in Victoria “with a view to participating in the tendering processes for … significant projects”.

The NDRC will also promote Victoria’s project opportunities in China. In return, Victoria will send an infrastructure delegation to China to learn from China’s exper­ience, provide more detailed inform­ation about infrastructure oppor­tunities and capabilities in Victoria, and send regular delegations to China to better understand the opportunities available in China and third-party markets.

Mr Shoebridge warned that the infrastructure agreement could ­include digital technologies.

“Premier Andrews may also be signing up to bring a whole set of Chinese communications, control and collection technologies along with this big build,” he said.

“I’d expect to see Beijing reward­ Mr Andrews as a very successful­ way of driving a wedge between the federal and state positions on the BRI and seeking to pressure Canberra to change, which would be a mistake. It’s bad news for Australia to have levels of government played off against each other by a foreign power.”

Mr Andrews said the BRI agreement would lead to increased­ investment Victoria.

A spokesman for federal Labor foreign affairs spokeswoman Penny Wong said the party expected ­governments at all levels to ­comply with laws and regulations regarding foreign investment.