Victoria welcomes its new Chinese overlords

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Via the ABC:

Victoria has formally pledged to sign up to China’s controversial One Belt, One Road initiative in a deal the state hopes will generate more trade and jobs.

Premier Daniel Andrews and Chinese ambassador to Australia Cheng Jingye finalised a memorandum of understanding this week, making Victoria the first and only Australian state to support President Xi Jinping’s global trade initiative.

China’s Belt and Road Initiative (BRI) is a massive global network of infrastructure projects that seeks to revive the Silk Road by creating two modern transit and trade corridors between China and Europe.

“This new Australian-first agreement sums up everything we have achieved with China over the past four years — it means more trade and more Victorian jobs and an even stronger relationship with China,” Mr Andrews said.

Under the massive plan first unveiled in 2013, China wants to revive an ancient network of land and ocean silk trade routes and has already spent billions of dollars on new infrastructure projects for roads, railways, ports and maritime corridors.

So far, 68 countries including New Zealand have signed up to the signature project of President Xi, which marks his nation’s plans to expand its power in the region and beyond.

To date, Australia’s official stance has been to not be part of the divisive trillion-dollar One Belt, One Road investment initiative.

Senior national security figures have often warned of serious “strategic” consequences if Australia formally signs up, although various investment projects on Australian soil seem to have had some form of involvement.

However, the MOU signed by Victoria marks a sharp turn in domestic views of the initiative which has been welcomed by the Chinese.

“Over the past five years, it has received positive responses and broad support from the international communities and has become a platform for international cooperation in policy coordination, connectivity of infrastructure, unimpeded trade, financing integration, closer people-to-people ties,” Mr Cheng said.

“It enables China to share development opportunities with other countries in the world and achieve mutual prosperity.”

Mr Andrews was the only state premier to be invited to the Belt and Road Forum which took place in China last year.

What possible gain can Victoria hope to get by fragmenting Australian foreign policy? It doesn’t export a thing to China.

One can only see this as some kind of political play to sure-up the student import trade. Pretty pathetic stuff from the state, which should leave foreign policy to the Feds.

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On that front, Labor has had a good idea to counter the very Chinese overlordship that VIC has just welcomed, via the AFR

In a speech to the Lowy Institute to be delivered on Monday, Mr Shorten will signal that greater engagement in the Pacific would not aim to offset China’s growing influence, by saying “strategic denial of others” was not the goal of Labor’s policy.

“A Labor government will put the Pacific front and centre in our regional foreign policy,” Mr Shorten will say, according to extracts of his speaking notes.

“We will engage with the Pacific not through the intricacies of geopolitics – but in its own right.”

We all know its true purpose even if it sensible to not speak its name.

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Everyone except VIC that is.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.