The Australian government has used newly enacted foreign veto laws to force the state of Victoria to cancel two agreements in principle with China. The decision provoked an angry response from China, with one diplomat complaining that his country was "not a cow … to be milked when she’s in her prime".
No specific projects were agreed by Victoria, but in 2018 the state signed memoranda of understanding with China’s National Development and Reform Commission (NDRD) to develop infrastructure schemes as Belt and Road Initiative (BRI) projects, China’s programme for improving global trade routes.
Those agreements cleared the way for cooperation on trade, finance and development policy. They were followed the next year by the formation of a working group, chaired by Victoria premier Daniel Andrews and NDRC head Ning Jizhe. One aim of the group was to increase the participation of Chinese companies in Victorian infrastructure schemes.
Victoria also agreed to send its construction firms to China to "better understand opportunities".
As well as construction, greater cooperation was envisaged in manufacturing, biotechnology, and agriculture, as well as improved market access for Chinese and Victorian goods into each other’s markets.
Victoria and China were due to agree a "Cooperation Road Map" in March last year, but this was delayed by the pandemic.
Andrews came under pressure to cancel the agreements after a trade war broke out between China and Australia last April, following Canberra’s call for an independent inquiry into the origins and handling of Covid-19. Andrews responded that the relationship was "far too important to farmers, to manufacturers, to workers, to profits for Victorian companies and therefore prosperity for our state".
China’s embassy in Canberra described the decision as "another unreasonable and provocative move".
Wang Xining, deputy head of the embassy, told the National Press Club yesterday: "China is not a cow. I don’t think anybody should fancy the idea to milk China when she’s in her prime and plot to slaughter it in the end. We are open for collaboration and cooperation, but we’ll be very strong in defending our national interest."
Marise Paine, Australia’s foreign minister, said Victoria’s arrangements were inconsistent with the country’s foreign policy. She cancelled them using powers given her by the Foreign Relations Act of 2020, which grants the government power over international agreements struck by states, territories, councils and universities.
Payne said she had been notified of more than 1,000 arrangements that may be reviewed under the legislation. She thanked the states and territories "for their cooperation and for what is developing as a cooperative approach under the scheme".
She added: "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."
Image: Victorian premier Daniel Andrews had resisted pressure to cancel the agreements (David Hewison/Dreamstime)