The Federal Government has torn up Victoria’s Belt and Road agreements with China. 

Foreign minister Marise Payne has announced she will cancel two Belt and Road deals, along with two older agreements between the Victorian government and Iranian and Syrian entities.

It comes after the Federal Government last year gave itself new powers to review and cancel  international agreements struck by state and territories, councils and universities.

Among the cancellations is a memorandum of understanding that the Labor premier, Daniel Andrews, signed with China’s national development and reform commission in 2018. 

The agreement included a pledge to work together on initiatives under Xi Jinping’s signature Belt and Road infrastructure-building program.

It would have allowed participation of Chinese companies in Victoria's infrastructure programs, cooperation of Victorian businesses in China, and allowed Victorian engineering and design firms to bid for contracts for Belt and Road Initiative projects around the world. The non-legally binding agreement did not formally commit the Victorian government to doing anything.

The Belt and Road Initiative has been relatively benign for more wealthy countries, but has been criticised as an expression of ‘soft’ powers or ‘debt trap diplomacy’, for example in the Philippines, which has switched its policy in favor of Chinese claims in the South China Sea after China’s massive infrastructure investments. 

The Victorian Government has not spoken out about the cancellation. National security experts and federal Labor have welcomed the decision to scrap the deal.

Ms Payne has also moved to veto the subsequent framework for establishing a working group between the other governments. 

The decision comes while relations between the Australian and Chinese governments are at their lowest levels in decades.

Mr Andrews has claimed that the agreements are important to secure an increase in infrastructure investment in Victoria.

A spokesperson for the Chinese embassy in Canberra said cancelling Victoria’s Belt and Road deal “is bound to bring further damage to bilateral relations”, claiming Australia “will only end up hurting itself”. 

Some have criticised the Federal Government eagerness to reject this form of Chinese influence, while it had no problem with Bellamy's baby formula's $1.5 billion Chinese takeover bid, the $4 billion sale of Alinta to a Chinese energy giant, the 99-year lease of the Port of Darwin granted to Chinese-owned company Landbridge, or the purchase of $113.2 billion worth of Australian residential and commercial property by buyers from mainland China. 

But Ms Payne says the cancelled deals did not pass the test in Australia’s new Foreign Relations (State and Territory Arrangements) Act, which passed the parliament late last year.

States and territories have completed audits of their arrangements with foreign national governments, as required by the legislation.

Ms Payne said she was notified of more than 1,000 arrangements under the new legislation. 

“The more than 1,000 notified so far reflect the richness and breadth of Australia’s international interests and demonstrate the important role played by Australia’s states, territories, universities and local governments in advancing Australia’s interests abroad,” she said in a statement.

“I will continue to consider foreign arrangements notified under the scheme. I expect the overwhelming majority of them to remain unaffected. I look forward to ongoing collaboration with states, territories, universities and local governments in implementing the Foreign Arrangements Scheme.”

She also cancelled a Memorandum of Understanding between Victoria’s Department of Education and Training and the Technical and Vocational Training Organisation, Ministry of Labour and Social Affairs for the Islamic Republic of Iran, signed in late 2004.

The other deal to be scrapped is a ‘Protocol of Scientific Cooperation’ between Syria’s Ministry of Higher Education and Victoria’s Ministry of Tertiary Education and Training of Victoria, signed 31 March 1999.