Victoria is locked in critical final-stage negotiations with Beijing over investments worth billions of dollars at the same time as its Treasurer has savaged the Morrison government’s “vilification” of China over trade and the COVID-19 pandemic.
Tim Pallas’s pro-China intervention comes as the deadline for Victoria to sign an “investment road map”, which ties the state to the communist giant with extraordinarily cosy language, is just weeks away.
Under Victoria’s decision to sign-up to China’s Belt and Road Initiative — in defiance of federal government security advice — key investment details are meant to be signed by the middle of 2020 following completion of a draft road map in March.
The looming deadline emerged as the Andrews government dodged parliamentary questions on Wednesday about whether any of the state’s $24bn coronavirus rescue package would be borrowed from China.
The “framework agreement” underpinning the Victoria-China deal was signed by Premier Daniel Andrews and Vice-Chairman Ning Jizhe of the National Development and Reform Commission of the People’s Republic of China on October 23 last year.
The document raises the possibility that Mr Pallas’s unprecedented backing of Beijing in its row with the Morrison government over the global coronavirus pandemic investigation was motivated by protecting the Belt and Road Initiative.
The “co-operation principles” in the nine-page agreement — entitled Jointly Promoting the Silk Road Economic Belt and the 21st Century Maritime Silk Road — uses exceptionally reverential language to mandate how Victoria should conduct its state-to-superpower relationship.
Article 1 states Victoria and China must: “Adhere to the principle of mutual consultation, joint efforts and shared benefits. Bearing the Silk Road spirit of peace, co-operation, openness, inclusiveness, mutual learning and mutual benefit.
“Adhere to the principles of business-dominated, market-orientated and government-guided.
“The governments of both sides should strengthen co-ordination and guidance, as well as policy support to ensure long-term and sustainable co-operation … stick to all-round co-operation … with a focus on pushing forward important areas and major projects that have a bearing on the long-term interests of the two sides.”
On Tuesday, Victoria’s Treasurer launched a savage attack on the Morrison government, laying direct blame for China’s 80 per cent tariff hit on Australian barley farmers on the federal government’s decision to push for a global investigation into China’s role in the pandemic.
“I think I’ve been pretty clear that I’m not a big fan of the way the federal government has managed the relationship with China more generally,” Mr Pallas said.
Asked whether he saw China’s tariffs as retaliation for Australia’s stance on an inquiry into the origins of COVID-19, Mr Pallas said: “I can’t hazard to speculate what goes on in the minds of leaders of other countries. All I can say is I don’t suppose it would come as a surprise to anybody that this was the consequences of the way that the federal government have conducted themselves.”
Asked last week whether Victoria’s Belt and Road agreement should be paused pending the outcome of an inquiry into the origins of coronavirus, Mr Pallas said “Absolutely not”.
“The inquiry, and of course there does need to be an inquiry into this pandemic event, but I think the idea of vilification of any single nation in this context, I think, is dangerous, damaging and probably irresponsible in many respects,” he said.
“What they don’t need is vilification of one nation who have gone through a very traumatic time themselves and need necessarily to recover their economy, and we see a partnership with all trading nations as being a vital part of the growth and the opportunity for Victorians.”
The Andrews government failed to respond to detailed questions from The Australian about the October 23 “framework agreement”. It also declined to detail any specific investments that have been generated by the Victoria-China deal more broadly.
“This agreement is about creating opportunities for Victorian businesses and local jobs — opportunities that will be more important than ever as we rebuild from the coronavirus pandemic. We have no update on the road map at this time,” a spokeswoman said.
“The focus of government is on protecting the health of Victorians by slowing the spread of coronavirus, and getting thousands of people back to work — building projects that matter to Victoria.”
The Pallas intervention is the latest chapter in a long and close relationship between Mr Andrews and China, which blossomed in 2013 when he was opposition leader and conducted an official visit to Beijing.
Since coming to office in November 2014, Mr Andrews has visited China six times. In his last official visit in October last year, he signed the “framework agreement” locking Victoria into inking the deal by mid-2020.
Mr Andrews’s flourishing relationship with China can be charted back to his time as opposition leader between 2010 and 2014.
A young Chinese-Australian adviser called Mike Yang, who worked in the Andrews camp in 2011-13, is credited with being the architect of the relationship. In 2013, he accompanied Mr Andrews on a trip to China.
Photos of that trip — just a year before he would be elected Premier — show a beaming and youthful Mr Andrews taking in the sites such as The Great Wall and a local market.
Mr Yang has been a vice-president of the Australian Council for the Promotion of Peaceful Reunification of China, an organisation criticised as being a front for spreading pro-Communist Party policies and messages in Australia.
Mr Yang has described the group as nothing more than “another Chinese community group”.
Mr Pallas’s decision to criticise the Morrison government came despite Beijing’s barley tariff appearing to breach the October 2019 BRI “framework agreement” that sets out a commitment to free trade.
It is also a massive snub to Victoria’s barley farmers. Wheat is Victoria’s largest crop, followed by barley.
Article 3 commits both China and Victoria to supporting free trade. “The two sides agreed to promote … unimpeded trade, financial co-operation and people-to-people ties” as part of the shared objective of enhancing “two-way trade for mutual benefit between Victoria and China, especially for agricultural products, food …”
The Victoria-China document deals with dispute resolution in just 17 words, stating: “Both sides will settle differences in the interpretation, application or implementation of this agreement through friendly consultations.”
In Article 4 of the “framework agreement”, China makes four major commitments in return for Victoria signing up. “Both sides have good co-operation, foundation, great potential and prospect,” the agreement states.
Beijing makes a commitment to encourage Chinese infrastructure firms to set up in Victoria, promoting Victoria’s building projects in China, briefing Victorian firms on “third party” opportunities and exploring the possibility of establishing a “joint infrastructure accelerator”.
On Wednesday, Transport Infrastructure Minister Jacinta Allan repeatedly refused to answer questions about whether up to $24.5bn the Andrews government intends to borrow to deal with the coronavirus pandemic will be sought from China through the Belt and Road agreement.
Ms Allan fronted a parliamentary accounts and estimates committee hearing and faced questions about Chinese involvement in signature infrastructure projects including the Melbourne Metro rail tunnel and West Gate Tunnel. Chinese government-backed companies, including CPB, John Holland and MTR, are key members of the consortium building the projects.
Committee deputy chair and Liberal MP Richard Riordan repeatedly asked how much of the $24.5bn in borrowings would come from the Chinese government.
Ms Allan initially sought to deflect the question, before Mr Riordan interjected: “Minister, back to the tunnels. What are your commitments with the Chinese government?”
Committee chair and Labor MP Lizzie Blandthorn then intervened, asking Mr Riordan to keep his questions “relevant” to the COVID-19 pandemic.
“It’s very relevant. We’re wondering how it’s funded. Go for it, minister. Have you got an answer?” Mr Riordan hit back.
Ms Allan again deflected the question, referring to the appearances by the Premier and Treasurer and their commitment to account for the expenditure of the $24bn. “I’ve got nothing further to add,” she said.
Mr Riordan continued to urge Ms Allan to return to the issue of Chinese involvement in building and funding Victorian infrastructure projects.
Ms Allan replied: “That question that you go to around commitments made with China and commitments on our projects, I think it’s more than a little overstepping the bounds of the terms of reference for this inquiry and the bounds of any sort of decent public discussion about public delivery of transport infrastructure projects in this state.”
Mr Riordan then asked: “Will you rule out using the Belt and Road agreements with your government and the Chinese government to help finish these projects?”
Ms Allan then sought to have the question ruled out of order on the basis that it was “not relevant” to the inquiry’s terms of reference.
