China’s controversial Belt and Road initiative has come under fire from Scott Morrison as he pushes the West to help developing nations build key infrastructure so they aren’t forced to rely on funding from Beijing.
In a speech in Perth ahead of the G7 summit, the Prime Minister will warn developing nations to be wary of projects that compromise their ‘resilience or sovereignty’ and leave them vulnerable to ‘debt diplomacy’ when a lender saddles a borrower with debt to gain leverage.
Mr Morrison will call on institutions including the World Bank and Asian Development Bank to be more generous and provide attractive alternatives to China’s scheme, which is building projects in dozens of countries around the world.
It comes after the Prime Minister tore up Victoria’s two deals under the BRI on the grounds they were inconsistent with Australia’s foreign policy and security interests.
President Xi Jinping’s China has signed up dozens of countries to its Belt and Road Initiative. He is pictured after signing a memorandum up understanding with Portugal in December 2018
In a thinly veiled criticism of the Belt and Road Initiative, Mr Morrison will say: ‘Infrastructure that lacks appropriate standards – or that is too expensive, or isn’t environmentally sustainable, or that comes with onerous conditions – just isn’t worth having.
‘Projects should be high-quality – and affordable. They should meet real need, and deliver sustainable economic benefits. And they should not compromise countries’ resilience or sovereignty.’
The Belt and Road Initiative, set up by President Xi Jinping in 2013, rang alarm bells in the West when Sri Lanka leased its new Hambantota port – which was mostly funded by Beijing – to a Chinese company for 99 years to help pay off its debts to international lenders.
Beijing’s critics accuse it of deliberately indebting developing countries to expand its influence and project its power in a type of modern-day colonialism, accusations China denies.
A report by the Centre for Global Development in 2018 found eight countries that had signed deals with China were at ‘high risk’ debt distress.
They were Djibouti, where China has its only overseas military base, The Maldives, Laos, Montenegro, Mongolia, Tajikistan, Kyrgyzstan and Pakistan.
The Grand Ethiopian Renaissance Dam (pictured in December 2019) near Guba in Ethiopia is being built by Chinese companies. Ethiopia is a major recipient of Chinese loans
Much of the debt owed is to the state-owned Export–Import Bank of China.
China has also been active in Australia’s backyard, proposing to build a port city at Daru in Papua New Guinea, just 200 kilometres from the northern tip of Queensland.
A Hong-Kong based company made the proposal in April 2020, offering to build a business area, residential buildings and a resort over 100 square kilometres.
Prime Minster James Marape said he wasn’t aware of the proposal and Mr Morrison said it was ‘just speculative’ and he ‘couldn’t see Papua New Guinea being terribly hasty on anything like that.’
In order to protect Australia’s neighbours from Chinese dependence, the Morrison government announced a $2billion scheme called the Australian Infrastructure Financing Facility for the Pacific in July 2019.
So far, approved projects include a solar plant in Papua New Guinea, submarine cables in Timor Leste and Palau and a flood alleviation project in Fiji.
But the Prime Minster wants the G7 nations of the UK, Canada, France, Germany, Italy, Japan, and the US to do more.
The Prime Minister will caution allies about Beijing’s Belt and Road Initiative, which aims to expand Chinese influence by building infrastructure around the world. Pictured: A Chinese labourer in Colomobo, Sri Lanka
‘Part of bolstering economic recovery in a post-COVID world should be a stronger offering when it comes to infrastructure investment, especially in our region,’ he will say.
‘More needs to be done to provide for a coordinated and transparent approach to resolving the debt challenges faced by many developing economies – and to provide alternative sources of financing.
‘Absent this safety net and transparency, our neighbours face obstacles to open economic development and can become vulnerable to debt diplomacy,’ he will say.
Also in his speech, Mr Morrison will warn the risk of war with China in the Indo-Pacific region is growing and the world is facing uncertainty not seen since the 1930s as he outlines how Australia can work with international partners to counter communist China and make the world safe for liberal democracies to flourish in.
The Prime Minister will also back US President Joe Biden’s calls for Beijing to agree to a ‘complete and transparent’ international investigation into the origins of coronavirus amid concerns the deadly disease leaked from a lab in Wuhan where it was detected in late 2019.
Australia’s relationship with China – its largest trading partner by far – has rapidly deteriorated since the Morrison government called for a pandemic inquiry last year, with Beijing blocking several key Aussie exports including coal, barley, beef, seafood and wine.
Chinese ministers have refused to answer calls from their Australian counterparts, even though Mr Morrison says he ‘stands ready’ to engage in talks.
Three Chinese Navy ships made a four-day visit to Sydney in June 2019 with Scott Morrison saying it was reciprocal after Australian naval vessels visited China. Since then relations have soured
The Prime Minister will also back US President Joe Biden’s calls for China to agree to a complete and transparent international investigation into the origins of coronavirus amid concerns the deadly disease leaked from a lab in Wuhan (pictured)
Since president Xi Jinping came to power, and particularly in recent months, China has pushed an increasingly assertive foreign policy under which it has reinforced territorial claims in the South China Sea, killed Indian troops in the Himalayas and frequently flown fighter jets over Taiwan.
The world’s most populous nation of 1.4billion has also caused global outrage by cracking down on pro-democracy protesters in Hong Kong and repressing the Uyghur ethnic minority in the country’s west.
In one of his first speeches after moving into the White House, President Biden – who is one of Australia’s most important allies – described China as ‘our most serious competitor’ and vowed to ‘confront China’s economic abuses, counter its aggressive, coercive action and push back on China’s attack on human rights’.
Mr Morrison will warn that China’s growing might and strategic competition with the US, combined with the economic damage and instability caused by the pandemic, means the Indo-Pacific region is facing the real prospect of war.
‘The risks of miscalculation and conflict are growing,’ he will say in his speech.
‘The simple reality is that Australia’s strategic environment has changed significantly over recent years.
‘Accelerating trends are working against our interests. And the technological edge enjoyed historically by Australia and our allies is under challenge.’
The Prime Minister will say there has never been a more important time for him to attend the G7 summit.
Scott Morrison is attending the G7 summit as a guest of Boris Johnson. The pair are pictured together at the 2019 G7 summit in France
Chinese sailors waved after three ships arrived at Garden Island Naval Base in Sydney in June 2019. The arrival took Australians by surprise but was planned by governments
‘There is much at stake, for Australia, for our region, and the world. We are living in a time of great uncertainty not seen since the 1930s,’ he will say.
Mr Morrison will warn that battle for dominance between the US and China – which is expected to become the world’s largest economy in 2032 – ‘threatens global and regional stability, upon which our security, prosperity and way of life depends.’
The biggest threats Australia faces include ‘rapid military modernisation, tension over territorial claims, heighted economic coercion, enhanced disinformation, foreign interference and cyber threats, enabled by new and emerging technologies’, he will say.
The risks of miscalculation and conflict are growing
Australian PM Scott Morrison
Last year the Prime Minister warned that a foreign state actor had launched a series of cyber attacks on Australian institutions such as banks, hospitals and government agencies. He did not name China but sources said Beijing was behind the ongoing threat.
In the face of a growing threat, Mr Morrison will remind allies that his government is spending $270billion to beef-up its defence forces over the next ten years with new 370km-range missiles, state-of-the-art drones, artillery systems and an 800 extra troops.
‘Australia has never sought a free ride when it comes to our security. We may look to our allies and partners but we never leave it to them,’ he will say.
‘We bring agency and critical sovereign capabilities to our partnerships. We add value to the combined effort. This is why we are respected.’
Mr Morrison will also call for major changes to the World Trade Organisation to punish nations who use ‘economic coercion’ – in a direct bid to stop China banning exports when it falls out with a trading partner.
Australia has lodged a dispute with the WTO over a Chinese tariffs on barley and is on the verge of launching a dispute over Beijing’s tariffs on wine, both of which it says are unjustified.
Polystyrene boxes filled with live rock lobsters were left stranded at Shanghai Airport after China blocked exports from Australia citing regulation breaches
World Health Organization Director General Tedros Adhanom Ghebreyesus (left) and Chinese President Xi Jinping shake hands in Beijing on January 28 ahead of their meeting to discuss how to curb the spread of coronavirus
But a resolution could take years and may not require any compensation so Mr Morrison wants harsher punishments for breaching trade agreements.
‘The most practical way to address economic coercion is the restoration of the global trading body’s binding dispute settlement system.
‘Where there are no consequences for coercive behaviour, there is little incentive for restraint,’ he will say.
Last year the Chinese embassy in Canberra leaked a list of grievances the government has with Australia, including banning Chinese company Huawai from its 5G network, passing new foreign interference laws and speaking out on human rights violations.
But Mr Morrison has refused to back down on any of them and insists that Australia’s allies support that decision.
‘In my discussions with many leaders I have taken great encouragement from the support shown for Australia’s preparedness to withstand economic coercion in recent times,’ he will say.
The Prime Minister also wants to overhaul the World Health Organisation which Liberal MPs have called ‘glacially slow’ to react to the pandemic.
Australian taxpayers give the WHO $8.4million a year, as well as regular top-up payments, which in 2018 reached $57million.
But the UN organisation stalled on declaring a pandemic, told countries to keep borders open and heaped praise on China despite accusations the Communist Party attempted to cover up the initial outbreak.
Chinese People’s Liberation Army (PLA) soldiers assembling during military training at Pamir Mountains in Kashgar, in northwestern China’s Xinjiang region in January
WHO Director-General Tedros Adhanom – a former Ethiopian politician who served in senior roles under Meles Zenawi who ran a brutal dictatorship with close ties to Beijing – has even been labelled a ‘China apologist’ by various commentators.
Australia was one of the first nations to call for an inquiry into the origins of the pandemic and demanded scientists be granted similar powers to nuclear weapons inspectors, much to the ire of Beijing.
‘I will lend Australia’s weight to growing calls for a stronger, more independent World Health Organization with enhanced surveillance and pandemic response powers,’ Mr Morrison will say.
Last month President Biden asked his spies to further investigate how the pandemic began after they failed to work out if it spawned naturally in the wild or was accidentally leaked from the Wuhan Institute of Virology, a lab that experimented with coronaviruses.
‘I strongly support President Biden’s recent statement that we need to bolster and accelerate efforts to identify the origins of the Covid-19 pandemic,’ Mr Morrison will say.
‘Having led calls for an independent inquiry, it remains Australia’s firm view that understanding the cause of this pandemic is essential for preventing the next one, for the benefit of all people.’
After his trip to Perth, Mr Morrison will fly to Singapore for talks with Prime Minister Lee Hsien Loong and then on the G7 in Cornwall, south-west England.
Following the summit he will spend a few days with Boris Johnson in London to discuss an Australia-UK free trade deal, which could be agreed in principal this month.
He will then meet French President Emmanuel Macron in Paris before flying home and doing two weeks of coronavirus quarantine at The Lodge in Canberra.