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The deal formally tied Victoria to the BRI, Chinese President Xi Jinping`s foreign policy agenda, to fund infrastructure around the world, often directly benefiting Chinese companies. China has been criticized by some governments, including the United States, for doing “debt-trap diplomacy” as part of the program, which imposes unsustainable debts on developing countries to obtain economic or political concessions. The memorandum was consistent with a draft agreement submitted to the Department of Foreign Affairs and Trade in June. Tim Pallas, Victoria`s treasurer, said this month in a parliamentary inquiry that the state would “absolutely not” reconsider its Belt and Road deal, accusing the federal government of “denigrating” China because of its insistence on conducting an international investigation into the Covid-19 pandemic. What Victoria is proposing has an impact on foreign policy and national security, which the Victorian government simply cannot assess. “Victoria needs to explain why it is the only state in the country to have reached this agreement,” he said. The federal government is now very concerned about the prospect of Victorian companies collaborating with Chinese companies under deals in the Pacific, which could further push island states into debt to pay for non-economic infrastructure projects. Australia has launched its Pacific “step up,” in part in response to Beijing`s growing influence in the region. He said the federal government, with Malcolm Turnbull as prime minister and Julia Bishop as secretary of state, had already refused to support the Belt and Road Initiative as a whole, but said it would consider specific projects on its merits. Pakula defended Victoria`s controversial Belt and Road deal with Beijing, but admitted it does not immunize Victorian exports from increased tariffs. “We need a real relationship with China, not unilateral.” Victorian Prime Minister Daniel Andrews said the much-needed deal with China will bring jobs and new infrastructure to the state. It also implies that the Chinese government encourages their country`s construction companies to establish a presence in Victoria and apply for infrastructure projects of the State government. “And we are working to strengthen engagement with China in developing regional trade and infrastructure that is guided by international standards of governance and transparency.” He added: “But let`s be clear: a future laboratory government would not sign a Silk Road agreement with China.” We don`t agree with China on everything,” Andrews said Tuesday.

The agreement reached last year by the Victorian laboratory government with China is not legally binding. “Victoria has the right to work within borders as she wishes, but it is simply not constructive to take this approach,” he said. . . .

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