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Australia takes a savage swipe at China over its Belt and Road Initiative

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

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

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

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)

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

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

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

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

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.

Missiles, drones and artillery systems: How will Australia spend $270billion over next ten years? 

Maritime ($75 billion)

Expanded maritime force to provide greater capability for anti-submarine warfare, sealift, border security, maritime patrol, aerial warfare, area denial and undersea warfare. 

Between $168 and $183 billion for the acquisition or upgrade of Navy and Army maritime vessels out to the 2050s. Between $5 to $7 billion in undersea surveillance systems. 

Between $400 to $500 million in long range maritime strike missiles. 

Air ($65 billion)

Expanded air combat and mobility and new long range weapons and remotely piloted and autonomous systems will be introduced. 

Between $10 and $17 billion investment in fighter aircraft. Between $700 million to $1 billion for Operational Radar Network expansion. 

Between $3.4 billion and $5.2 billion to improve air launched strike capability. 

More than half of $270billion will be spent on improving Australia's air and maritime forces, including buying new AGM-158C Long Range Anti-Ship Missiles (pictured) from the US

More than half of $270billion will be spent on improving Australia’s air and maritime forces, including buying new AGM-158C Long Range Anti-Ship Missiles (pictured) from the US

Between $6.2 and $9.3 billion in research and development in high speed long range strike, including hypersonic research to inform future investments 

Between $7.4 and $11 billion for remotely-piloted and autonomous combat aircraft, including air teaming vehicles. 

Land ($55 billion)

Investment to ensure land forces have more combat power, are better connected, protected and integrated with each other and with our partners. Between $7.4 and $11.1 billion on future autonomous vehicles. 

Between $7.7 and $11.5 billion for long range rocket fires and artillery systems including two regiments of self-propelled howitzers. 

Between $1.4 and $2.1 billion for Army watercraft including up to 12 riverine patrol craft and several amphibious vessels of up to 2,000 tonnes to enhance ADF amphibious lift capacity. 

Defence Enterprise ($50 billion)

 Investment key infrastructure, ICT, innovation and Science and Technology programs critical to the generation of Defence capabilities. 

Between $6.8 and $10.2 billion in undersea warfare facilities and infrastructure. 

Between $4.3 and $6.5 billion to enhance Air Force’s operational effectiveness and capacity in the Northern Territory. 

Australian Defence Force personnel, deployed with Theatre Communications Group 8, at the Taji Military Complex, Iraqi

Australian Defence Force personnel, deployed with Theatre Communications Group 8, at the Taji Military Complex, Iraqi

Between $900 million and $1.3 billion to upgrade key ports and infrastructure to support Australia’s larger fleet of amphibious vessels. 

Between $20.3 and $30 billion to increase the supply of munitions and between $1 and $1.5 billion to explore expanding industry capacity for domestic guided weapons and explosive ordnance production capability. 

Information and cyber ($15 billion) 

Bolster offensive and defensive cyber capabilities, enhance electronic warfare and command and control systems and improve intelligence, surveillance and reconnaissance systems. 

Space ($7 billion) 

Investment to improve resilience and self-reliance of Defence’s space capabilities, including to assure access to capabilities, enable situational awareness and deliver real-time communications and position, navigation and timing. 

Between $4.6 and $6.9 billion in upgrades and future satellite communications systems, including communications satellites and ground control stations under sovereign Australian control. 

Between $1.3 and $2 billion to build our Space Situational Awareness capabilities. 

How China’s feud with Australia has escalated

2019: Australian intelligence services conclude that China was responsible for a cyber-attack on Australia’s parliament and three largest political parties in the run-up to a May election.

April 2020: Australian PM Scott Morrison begins canvassing his fellow world leaders for an inquiry into the origins of the coronavirus pandemic. Britain and France are initially reluctant but more than 100 countries eventually back an investigation. 

April 15: Morrison is one of the few leaders to voice sympathy with Donald Trump’s criticisms of the World Health Organization, which the US president accuses of bias towards China. 

April 21: China’s embassy accuses Australian foreign minister Peter Dutton of ‘ignorance and bigotry’ and ‘parroting what those Americans have asserted’ after he called for China to be more transparent about the outbreak.  

April 23: Australia’s agriculture minister David Littleproud calls for G20 nations to campaign against the ‘wet markets’ which are common in China and linked to the earliest coronavirus cases.  

April 26: Chinese ambassador Cheng Jingye hints at a boycott of Australian wine and beef and says tourists and students might avoid Australia ‘while it’s not so friendly to China’. Canberra dismisses the threat and warns Beijing against ‘economic coercion’. 

May 11: China suspends beef imports from four of Australia’s largest meat processors. These account for more than a third of Australia’s $1.1billion beef exports to China. 

May 18: The World Health Organization backs a partial investigation into the pandemic, but China says it is a ‘joke’ for Australia to claim credit. The same day, China imposes an 80 per cent tariff on Australian barley. Australia says it may challenge this at the WTO. 

May 21: China announces new rules for iron ore imports which could allow Australian imports – usually worth $41billion per year – to be singled out for extra bureaucratic checks. 

June 5: Beijing warns tourists against travelling to Australia, alleging racism and violence against the Chinese in connection with Covid-19.  

June 9: China’s Ministry of Education warns students to think carefully about studying in Australia, similarly citing alleged racist incidents.   

June 19: Australia says it is under cyber-attack from a foreign state which government sources say is believed to be China. The attack has been targeting industry, schools, hospitals and government officials, Morrison says.

July 9: Australia suspends extradition treaty with Hong Kong and offers to extend the visas of 10,000 Hong Kongers who are already in Australia over China’s national security law which effectively bans protest.

August 18: China launches 12-month anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry. 

August 26: Prime Minster Scott Morrison announces he will legislate to stop states and territories signing deals with foreign powers that go against Australia’s foreign policy. Analysts said it is aimed at China.

October 13: Trade Minister Simon Birmingham says he’s investigating reports that Chinese customs officials have informally told state-owned steelmakers and power plants to stop Aussie coal, leaving it in ships off-shore.

November 2: Agriculture Minister David Littleproud reveals China is holding up Aussie lobster imports by checking them for minerals.

November 3: Barley, sugar, red wine, logs, coal, lobster and copper imports from Australia unofficially banned under a directive from the government, according to reports.

November 18: China releases bizarre dossier of 14 grievances with Australia. 

November 27: Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports where they have been denied entry. 

November 28: Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ or sold at below-cost. The claim is denied by both Australia and Chinese importers. 

November 30: Chinese foreign ministry spokesman Lijian Zhao posted a doctored image showing a grinning Australian soldier holding a knife to the throat of an Afghan child. The move outraged Australians. 

December 12: Australian coal is added to a Chinese blacklist.

December 24: China suspends imports of Australian timber from NSW and WA after local customs officers say they found pests in the cargo.

January 11, 2021: Australia blocks $300million construction deal that would have seen state-owned China State Construction Engineering Corporation takeover Probuild. The bid was blacked over national security concerns. 

February 5, 2021: China confirms Melbourne journalist and single mother Cheng Lei has been formally arrested after being detained in August, 2020.

February 23, 2021: China accuses Australia of being in an ‘axis of white supremacy’ with the UK, USA, Canada and NZ in an editorial.

March 11, 2021: Australia is accused of genocide by a Communist Party newspaper editor. 

March 15, 2021: Trade Minister Dan Tehan announced he wants the World Trade Organisation to help mediate discussions between the two countries over the trade dispute. 

April 21, 2021: Foreign Minister Marise Payne announces Australia has scrapped Victoria’s controversial Belt and Road deal with China using new veto powers. 

May 6, 2021: China indefinitely suspends all strategic economic talks with Australia, blaming the Morrison Government’s attitude towards the relationship. The move cuts off all diplomatic contact with Beijing under the China-Australia Strategic Economic Dialogue, freezing discussions between key officials below a ministerial level.

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