MARCH 23, 2017
SYDNEY — Australia has rejected a Chinese push for a formal alignment of Canberra’s A$5 billion (S$5.4 billion) state infrastructure fund with Beijing’s New Silk Road strategy, over concerns it could damage relations with the US at a time when it is asking Washington to do more in the region.
The Chinese initiative, also known as One Belt, One Road, envisages investing US$4 trillion (S$5.6 trillion) in port, road and rail projects overseas — and Beijing has been pressing Asia-Pacific economies to sign up.
But Canberra has confirmed there will be no agreement over its Northern Australia Infrastructure Facility during a four-day trip to Australia by Chinese Premier Li Keqiang starting yesterday. “No formal memorandum on this issue will be signed during the visit,” said one Australian official speaking on condition of anonymity.
Mr Li’s trip comes at a tricky time in Sino-Australian relations.
Canberra is pressing Washington to bolster its presence in the region and taking a tougher line on inward investment from China, recently blocking two high-profile takeovers.
Last week Ms Julie Bishop, Australia’s Foreign Minister, called on the administration of Mr Donald Trump to expand the US role in Asia to ensure stability and peace.
“While non-democracies such as China can thrive when participating in the present system, an essential pillar of our preferred order is democratic community,” she said in a speech in Singapore, which drew an icy response from Beijing.
“In the future we hope friends in various fields in Australia can ... abandon ‘you win, I lose’ and ideological prejudices,” Mr Zheng Zeguang, China’s Deputy Foreign Minister, told reporters on Tuesday.
The debate over whether Australia should align its state infrastructure fund with One Belt, One Road bears similarities to Canberra’s hesitation over joining the Asian Infrastructure Investment Bank (AIIB).
In 2014, Australia initially decided not to join the Chinese-led multilateral lender following lobbying by the US and Japan. But when the United Kingdom and several other western nations broke ranks and signed up to the AIIB, Canberra joined them.
“There is a view in the defence/security community in Canberra that initiatives like the AIIB and One Belt, One Road are a way to extend Chinese influence at the expense of the US,” said Mr Geoff Raby, a former Australian ambassador to China.
Mr Raby said Australia-China relations had “gone adrift”, with Canberra increasingly taking an idealist approach to relations focused on values, rather than a more pragmatic approach aimed at boosting economic ties with its largest trading partner.
Australian companies have expressed an interest in getting involved in the New Silk Road plan and business leaders in the country have set up a One Belt, One Road advisory group to facilitate this.
Government officials in the Northern Territory described official Chinese overtures first made by President Xi Jinping on a visit to Australia in 2014 as a great opportunity for Darwin.
But Chinese assertiveness in the South China Sea has made Australia wary of its regional ambitions.
Canberra recently tightened scrutiny of foreign takeovers following the purchase of Darwin port by the Chinese company Landbridge — a transaction that alarmed Washington because of the closeness of a US army base. FINANCIAL TIMES
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