'Australia not targeting China' after controversial Victorian trade deal scrapped

Foreign Minister Marise Payne says the Australian Government is not picking a fight with China after it scrapped Victoria's controversial infrastructure agreement with Beijing.

The move, amid already-heightened tensions with China, earned the immediate "strong displeasure and resolute opposition" of the Chinese embassy.

But Ms Payne told Ben Fordham on 2GB today the decision was not aimed at China and the government was committed to engaging with Beijing.

READ MORE: Australia's $160m hay exports to China under threat as permits lapse

"I want to be clear, it's not aimed at any one country," she said.

"We are absolutely committed to our continuing engagement with China."

Chinese officials said the decision by Australia would have serious repercussions.

"This is another unreasonable and provocative move taken by the Australian side against China," a spokesperson said in a statement.

"It further shows that the Australian government has no sincerity in improving China-Australia relations. 

"It is bound to bring further damage to bilateral relations, and will only end up hurting itself."

PM weighs in

The Prime Minister has responded to the government's decision to rip up the deal with China.

"Australia, under our government, will always protect Australia's national interests," he said.

"It is our job as a Commonwealth Government to ensure we protect those national interests, and that there is one foreign policy of this country.

"The foreign relations act that our Government put in place was designed to protect our national interests by ensuring that there were no other agreements entered in to by any other level of government that would conflict with Australia's national interest. So we have followed through."

'Matter for Federal Government'

Victorian MP Jaala Pulford today reiterated the decision to tear up the deal was a "matter for the Federal Government".

"Our focus is on supporting Victorian businesses to participate in the global economy as best they can," she said.

"We have always been a government that engages with the world."

Two deals linked to China's Belt and Road Initiative were among four Victorian government agreements deemed to be "inconsistent with Australia's foreign policy or to our foreign relations", Ms Payne said last night.

She told 2GB this morning that both countries had benefited from close economic ties but that Australia's national interest had to take priority.

The other two agreements ripped up in the first audit of major projects of its kind were with Iran and Syria, dating back as long as 22-years-ago.

Victoria's involvement with the Belt and Road Initiative has come under increasing scrutiny given Australia's tensions with China in recent months.

Premier Daniel Andrews has defended his state's agreement with China to support the $1.5 trillion plan from 2018.

The veto scheme giving the Foreign Minister the power to audit deals with foreign nations was introduced in December.

More than 1000 arrangements between states, territories, local governments and Australian public universities have already been submitted to the minister for consideration.

"The more than 1000 notified so far reflect the richness and breadth of Australia's international interests and demonstrate the important role played by Australia's states, territories, universities and local governments in advancing Australia's interests abroad," Ms Payne said.

Ms Payne said she would continue to consider submissions made under the scheme and "expect the overwhelming majority of them to remain unaffected".

As part of the first-ever audit, Ms Payne said she had approved a proposed memorandum of understanding on cooperation on human resources development in energy and mineral resources sector between the Department of Jobs, Tourism, Science and Innovation of the Government of Western Australia and the Ministry of Energy and Mineral Resources of the Republic of Indonesia.

The four arrangements are:

- Memorandum of understanding between the Department of Education and Training (Victoria) and the Technical and Vocational Training Organisation, Ministry of Labour and Social Affairs, the Islamic Republic of Iran, signed 25 November 2004.

- Protocol of scientific cooperation between the Ministry of Higher Education in the Syrian Arab Republic and the Ministry of Tertiary Education and Training of Victoria, signed 31 March 1999.

- Memorandum of understanding between the government of Victoria and the National Development and Reform Commission of the People's Republic of China on cooperation within the framework of the Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative, signed 8 October 2018.

- Framework agreement between the government of Victoria and the National Development and Reform Commission of the People's Republic of China on jointly promoting the framework of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, signed on 23 October 2019.