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  • Mohamed Abdulkahar

Why has Australia Scrapped China's Belt and Road Initiative?

Updated: Dec 21, 2021

On April 21st, the Australian federal government decided to scrap deals related to the Belt and Road Initiative (BRI). This move sparked outrage amongst the Chinese population and Australian business leaders. In addition, the scrapping of the BRI is threatening to worsen the already deteriorating relations between Australia and China. The actions taken by the Australian government were described as “provocative” and “unreasonable” by the Chinese embassy in Australia.

In this guide, we will take a look at what the BRI is, why it was scrapped by Australia, and how that affected the Australian-Chinese relations.

The Belt and Road initiative

The BRI is one of the biggest infrastructure projects that was launched in 2013 by President Xi Jinping that stretches from East Asia to Europe. It is an ambitious project that aims at being the modern Silk Road. The Chinese President’s vision of the project includes the creation of a network composed of railways, energy pipelines, highways, and streamlined border crossings through former Soviet Union republics to Southeast Asia.

As of today, there are over 60 countries that have signed with China to be involved in the project or expressed their interest in it. Much like the Made in China 2025 economic plan, China’s aim is to be the economic powerhouse of the world, create investment opportunities, encourage local consumption, and make China economically independent. The US believes the BRI is acting like a Trojan horse for the countries involved in the region.

The BRI is seen as an “unsettling” Chinese power expansion by some analysts. These fears grow as sceptics believe the BRI serves as a “debt trap” for involved countries. A report by the Centre for Global Development in 2018 showed that eight countries involved in the BRI are vulnerable to debt crises. The debt owed by some countries to China has skyrocketed since 2013 to the point where it surpassed 20% of the GDP of some countries. According to India, China’s strategy is to create unsustainable debt, especially for the neighbouring Indian Ocean nations, to take control of regional, narrow waterways.

China's maritime silk road

Why did Australia scrap the BRI?

Australian Foreign Minister Marise Payne used Australia’s new Foreign Relations Act to justify the scrapping of Victoria’s BRI. She said it was “about prioritising Australia’s national interests and ensuring there is consistency across our foreign relations”. Since it is believed that the BRI didn’t serve Australian national interests, the initiative was scrapped.

The actions taken by the Australian government were met with anger by Beijing. The Chinese government claimed that Australia had “no sincerity” in improving the Australian-Chinese relations, despite Foreign Minister Payne’s reassurance of Australia’s commitment to the continuation of engagement with China. On the other hand, Australian business leaders called the move “stupid”.

This incident created deeper wounds in the relations between Canberra and Beijing. So, what do these relations look like now?

China-Australia relations

Australia-China relations

The relationship between the two nations has already been deteriorating after Australia’s ban of Huawei, accusations of human rights violations in Xinjiang, and the Coronavirus investigation. However, the recent developments with the BRI have further complicated the matter. Weibo, a Chinese social network, saw more than 260 million views on the hashtag “China responds to Australia tearing up the Belt and Road agreement”. The overall engagement on the hashtag had negative views on Australia, saying it didn’t deserve respect, that it was a mad nation, and that it has no dignity.

According to Albert Zhang, Australian Strategy Policy Institute researcher, it is unlikely for all of the comments to have come from actual users. However, it is possible that the reviews on the hashtags were a mix of organic impressions and China-led propaganda tools. According to Zhang, the hashtag’s purpose was to stop any possible negative perception of the BRI.

The current relationship between the two nations is cold, and doesn’t seem to be getting warmer anytime soon. In addition to the BRI, the issues related to the coronavirus investigation, Huawei ban, and human rights violations accusations haven’t been resolved yet. The fuelling of the BRI issue on Chinese social media isn’t helping to improve the sentiment amongst the Chinese population towards Australia either.

For more information on this topic, head over to our section on Foreign Affairs.

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