On April 21, the Australian government intervened to cancel the state of Victoria’s controversial Belt and Road deal with Beijing stating that the arrangement was inconsistent with Australia’s foreign policy and national interests.
The move was criticised by a Chinese diplomat who noted it would not help improve bilateral relations which became tense over the last year as Australia refused to kowtow to economic coercion and took measures to protect itself from Beijing’s interference.
What is the Belt and Road Initiative?
The BRI is the Chinese Communist Party’s (CCP’s) trillion-dollar dual-purpose infrastructure scheme that seeks to increase China’s influence under CCP rule and trade links around the world while generating increasing income for China through a finance scheme for infrastructural development.It is believed that the CCP also sought to use the initiative to gain greater access to export markets, facilitate trade, and promote the renminbi as a global currency.
First announced in 2013 by China’s leader Xi Jinping, the name is derived from the concepts of the “Silk Road Economic Belt” and the “21st-Century Maritime Silk Road.”
It aims to “achieve economic integration and interconnected development” between China and the world via a series of six major “corridors” and key maritime points, which include China-Mongolia-Russia; China-Central Asia-West Asia; the China-Indochina peninsula; China-Pakistan; and Bangladesh-China-India-Myanmar.
What is Debt Trap Diplomacy?
In recent years, the concept of debt-trap diplomacy has caused concern as many of the BRI projects financed through Chinese state-controlled lenders have left borrowing nations distressed by massive debt burdens.For example, in December 2017, the Sri Lanka government agreed to hand over their entire Hambantota Port to Beijing on a 99-year lease, after Sri Lanka agreed to convert its debt of $1.4 billion into equity.
The Hambantota Port in southern Sri Lanka was financed and built by China as part of the BRI initiative. It is also a key strategic point for control over the Indian Ocean.
Likewise, in 2018, concerns about sovereignty led Sierra Leone to terminate a $400 million construction project of its airport that would have been entirely built, managed, and maintained by China.
“There’s often money loaned at concessional rates, or conditions placed in the debt documents, or government concessions that have to be made to the Chinese Communist Party,” he said.
“We will not take any risk to our telecommunications infrastructure, any risk to national security elements with our Five Eyes partners. We are going to protect and preserve the security of those institutions,” he said.
The Risk of Civil-Military Fusion
A further risk to BRI partner nations has been the decision by the CCP to establish a civil-military fusion doctrine (MCF), which means any Chinese SOE can be used for military purposes at any time.Established by the CCP as a way to quickly modernize the People’s Liberation Army (PLA), the apparatus encourages not only the conversion of technology into defense applications but also commercial enterprises’ participation in the defense industries.
In terms of the BRI initiative, this has taken the form of port and telecommunications infrastructure which the CCP can then use to spy on or influence partner nations. This was the case in Djibouti where China managed to secure control over the strategic Port of Djibouti and establish a military base as part of the build.
Why is Australia Concerned?
While the termination of Victoria’s BRI deal was expected, another reason for the move was to curtail the growing influence of the CCP in Australia’s region.While stating the national Labor party’s position on Victoria’s BRI deal, which he did not support, Albanese said that the CCP was “quite clearly” intervening in Australia’s national interest.
“And we’ve seen various examples of that on universities, for example. And we’ve seen that played out,” he said. “This isn’t a partisan issue.”
This sentiment was also echoed by Australian Prime Minister Scott Morrison who said that any agreements with foreign governments must be in Australia’s interests.
On April 22, Victorian Labor Senator Kimberley Kitching said agreements with foreign regimes are something that should be done by the federal government, not states.
BRI Fracturing Western Allies
Closer to home, New Zealand appears to be pivoting in its position towards China, with the country’s Foreign Minister Nanaia Mahuta expressing her country’s resistance to the Five Eyes alliance branching outside of intelligence sharing to discourse on human rights issues.“We are uncomfortable with expanding the remit of the Five Eyes,” she told reporters on April 19. “We would much rather prefer to look for multilateral opportunities to express our interests.”
One day after Australia’s foreign minister vetoed Victoria’s BRI deal, a joint conference was held with New Zealand’s foreign minister.
During the conference on April 22, New Zealand’s Mahuta said the Five Eyes alliance was “not necessary, all the time on every issue” as their “first port of call” when creating a coalition of support around particular issues in the human rights space. Mahuta added that New Zealand needed to “maintain and respect” China’s “particular customs, traditions and values.”
Mahuta’s remarks appeared to echo comments made by U.S. President Joe Biden in February during a CNN town hall when while discussing the Uyghur genocide in China, he said the country had “different norms.”
“Culturally, there are different norms that each country and they—their leaders—are expected to follow,” Biden said.
Similarly, Mahuta’s comments drew criticism from UK politicians who viewed the comments as a signal that New Zealand Prime Minister Jacinda Ardern was “crudely sucking up to China and backing out of the Five Eyes agreement.”
This will put New Zealand on a collision course with its western allies, according to Michael Shoebridge, defence director at the Australian Strategic Policy Institute.
“[New Zealand] will find that their policy framework collides with their values and interests, even if its purpose is to protect [New Zealand’s] China trade,” he told The Epoch Times.
“Quietly assuring Five Eyes partners everything is fine, while also assuring Beijing of the same thing, is not sustainable unless China radically changes direction under Chinese leader Xi.”
Meanwhile, Australia’s Foreign Minister Marise Payne said that while New Zealand had the right to determine its own response to human rights issues in China, she added: “We also have to acknowledge that China’s outlook—the nature of China’s external engagement both in our region and globally—has changed in recent years.”