Australia cancels deals on China’s Belt and Road

The Australian Government recently announced that it has cancelled deals on Belt and Road initiative over national interest.

What is the issue?

The Victorian State Government had signed two agreements with China. In 2018, an agreement was signed to promote infrastructure development initiative in the state. The second agreement was signed in 2019 that aimed to bring in Chinese investments in the state. Both these agreements were signed under the Belt and Road Initiative of China. The Australian Government recently cancelled both these agreements.

Why did Australia cancel the deals?

According to Australia, the agreements signed were out of line with foreign policy of the government. In December 2020, the Australian Government introduced the Australia Foreign Relations (State and Territory Arrangement) Act. The law allows Australian Government to cancel any agreements signed between a foreign country and the state authorities. This shall be done if the actions of the agreement threatened national interest. The law empowers the foreign minister to cancel any of such foreign agreement.

Recently, the Australian Government had directed the states to submit the details of the agreements signed by them with foreign countries under the law.


Under its foreign policy, Australia sees a free and open Indo-Pacific as a key goal. Australia recently launched the Australia-India Indo-Pacific Initiative. Also, the Australian Government allocated Rs 8.12 crores under the initiative.


The diplomatic relations between China and Australia have been deteriorating since Australia called for an international inquiry into the origins of COVID-19.

Way Forward

Australia is to revoke a 2004 MoU signed between Iran and Victoria’s Education Department as well. Also, the Australian Government is to revoke a scientific cooperation agreement signed between Syria and the State of Victoria that was signed in 1999.




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