Australian government tears up Victoria's Belt and Road agreement with China, angering Beijing

The Australian government has canceled a Belt and Road agreement signed by China and the state government of Victoria, escalating trade and diplomatic tensions between Beijing and Canberra. Victoria — the country's second largest and wealthiest state — signed a memorandum of understanding on the Belt and Road Initiative (BRI) with the Chinese government in October 2018, the only government in Australia to sign up for Chinese President Xi Jinping's signature global infrastructure initiative.

Part of Xi's vision for China's future economic growth, the BRI is intended to build new trade corridors between Europe and Asia, following the path of the historic silk road. While other countries that have joined the BRI have received large scale funding from Beijing, the deal between China and Victoria appeared to be aimed more at encouraging future investment and trade.

In a statement Wednesday night, Foreign Minister Marise Payne said the federal government had evaluated "more than 1,000" deals between Australia's states and territories and foreign governments.

Read more