New Australian Laws Likely To Anger China

The Australian government has drafted new laws that would cancel international deals struck by lower tiers of governments with foreign states that are not in Australia’s interests, a minister said on Thursday in a move likely to increase tensions with China.

Victoria state’s memorandum of understanding with Beijing under China’s belt and road initiative, signed two years ago to attract more Chinese infrastructure investment, is among the deals to be reviewed, Foreign Minister Marise Payne said.

But the legislation to be introduced to Parliament next week did not target China, she said.

The Australian government had already identified 135 agreements with more than 30 countries that needed to be reviewed, she said.

“Most Australians would agree that it’s important that engagements are consistent with Australia’s national interests and with our foreign policy,” Payne told Nine Network television.

“It’s consistent with protecting Australia’s national interests and determining what is important for us to pursue,” she added.

The legislation would give Payne power to scrap international deals struck by state governments, public institutions such as universities and at local government level, sister-city partnerships.

Future deals would need federal government approval and could be revoked later.

The Foreign Relations Bill was announced days after the government revealed it had blocked the us$430 million sale of a major dairy business, Lion Dairy and Drinks, to China Mengniu Dairy Co. on the grounds that it would be “contrary to the national interest.”

The government intervention was unusual in that it did not prevent an Australia-owned company from being taken over by a foreign company. Australia had instead blocked the transfer of ownership of an Australia-based asset from one foreign company, Japan’s Kirin Holdings Co., to a Chinese company.

The Victoria government agreement with Beijing has raised concerns among federal government lawmakers that it could increase Chinese interference in Australia’s second-most populous state.

Peter Jennings, executive director of the Australian Strategic Policy Institute think tank, said the Victorian deal with Beijing should be overturned.

“That was something that the Victorian government pursued quite openly against the stated interests of the federal government and the opposition ... that Australia was not going to commit itself to those types of arrangements,” Jennings told Australian Broadcasting Corp.

“I just don’t see that that is something that should be sustainable,” Jennings added.

James Laurenceson, director of University of Technology Sydney’s Australia-China Relations Institute, questioned whether the proposed legislation was “an overreaction.”

“We know the Australian government has been running a very tough line on China, that’s been consistent and it hasn’t been Affected by the belt and road memorandum of understanding at all,” Laurenceson said. (AP)