UPDATE - Australia cancels deal with China belt/road project

UPDATES WITH CHINA'S RESPONSE; CHANGES DECK

By Islamuddin Sajid and Riyaz ul Khaliq

ANKARA (AA) – The government of Australia has scuttled a deal its Victoria state made with China as part of Beijing's massive Belt and Road Initiative (BRI), the Foreign Ministry has said.

The move came after Victoria refused to cancel its agreement with Beijing, which was signed in 2018.

Foreign Minister Marise Payne approved the cancellation of four agreements and memoranda of understanding with China, Iran and Syria, the Foreign Ministry said in a statement late Wednesday.

"I consider these four arrangements to be inconsistent with Australia's foreign policy or adverse to our foreign relations in line with the relevant test in Australia's Foreign Relations," said Payne.

China's Belt and Road Initiative is an ambitious program to connect Asia with Africa and Europe via land and maritime networks along six corridors to boost regional integration, increase trade, and stimulate economic growth.

In the same statement, Payne approved a memorandum of understanding on energy and mineral resources cooperation between the state of Western Australia and Indonesia.

This is the first time Payne used her new powers under legislation last year that allows her to cancel agreements signed by state and territory governments with foreign countries.

The Chinese Embassy in Australia branded the move "unreasonable and provocative."

"We express our strong displeasure and resolute opposition" to the decision, said an embassy statement, calling it "unreasonable and provocative."

"It further shows that the Australian government has no sincerity in improving China-Australia relations. It is bound to bring further damage to bilateral relations and will only end up hurting itself," the embassy added.

Relations between Beijing and Canberra turned sour after the latter joined its Western allies in seeking a probe into the origins of COVID-19, which first appeared in Wuhan, China, in December 2019.

- 'Shake off Cold War mentality'

In a scathing Twitter attack over undoing the BRI deals, China asked the Australian government to "shake off the Cold War mentality."

Did Payne "fully consult with the Australian people, esp. those in Victoria before announcing the decision to cancel Victoria's BRI agreement with China? Has she considered what this could cost them?" asked Hua Chunying, China's Foreign Ministry Spokesman.

"This is another example that proves some in Australia have zero sincerity in improving relations with China. The Australian side should shake off the Cold War mentality and ideological bias," Hua added.

Wang Wenbin, another ministry spokesman, told reporters in Beijing that Australia's move amounts to "bucking the development trend of history."

It is "a backward step," said Wang.

"China has lodged stern representations with the Australian side, urging it to revoke the decision, or it will prompt China to hit back in a hard way," he added.