Federalism and the Belt and Road Initiative: Managing tensions between Australian governments

17 Apr 2018

The Australian Government opposes China’s massive Belt and Road Initiative (BRI), largely on the grounds that it may help to end the United States-led order in the Indo-Pacific region and beyond. While that is a grave concern, it does not discount the fact that the many economic opportunities produced by the BRI may still be enticing to other actors, principally Australia’s State and Territory Governments. The Northern Territory’s controversial lease of the strategically-important Port of Darwin to a Chinese company with People’s Liberation Army links, highlights the type of tensions that might increase between the federal government and the States and Territories over the BRI and China’s plans in Australia more generally.

Key points:

- Canberra’s opposition to China’s Belt and Road Initiative (BRI) sets the stage for possible conflict with State and Territory Governments, which favour closer economic ties with China but do not typically consider strategic issues.

- The BRI could create new opportunities for Australian exports, including access to minerals and supply chain management services, yet such opportunities will not be easily accessed.

- Increased Chinese investment in Australia and the linking of programmes, such as Developing Northern Australia, to the BRI have become more controversial, given the willingness Beijing has displayed elsewhere to take control of strategic assets.

- Canberra may need a more comprehensive strategy for addressing both the scant attention paid to strategic concerns by the States and Territories and its own lack of consideration of the implications that Chinese economic custom and plans such as the BRI have for sub-national jurisdictions.

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