Australia moves to rein in states' deals with China

SYDNEY: Australia's government can veto agreements that state authorities and universities ink with foreign countries under new legislation passed Tuesday, taking square aim at controversial deals with Beijing.

The new federal powers to scupper existing and future deals "where they adversely affect" the national interest come as China and Australia are at loggerheads over trade and competing claims of influence in the Pacific.

"This legislation is necessary to appropriately manage and protect Australia's foreign relations and the consistency of our nation's foreign policy," said foreign minister Marise Payne.

Under Australia's constitution, the federal government is responsible for foreign affairs and defence. States typically deliver services such as health and education but in reality there is frequent overlap.

Future deals will now need government approval -- in some cases before negotiations can even begin -- and existing agreements can be declared invalid or terminated.

The new rules call into question Victoria state's support for China's "Belt and Road Initiative" -- a vast network of projects that offers Beijing sizeable geopolitical and financial leverage.

Prime Minister Scott Morrison has been highly critical of a Victoria-China memorandum of understanding, and local media have quoted government officials as saying the deal is now "probably toast".

Also in doubt is the presence of Chinese-government-backed Confucius Institutes at Australia's public universities which critics say promote the Communist Party's self-serving version of Chinese culture and history.

The laws do not cover commercial deals and do not specifically name any single country.

But there is widespread unease in Australia at China's growing influence and Canberra has banned state-linked telecoms giant Huawei from building Australia's 5G network.

It has also tightened foreign investment laws for corporations and created a register of foreign-paid lobbyists, with the attorney general writing to universities and Confucius Institutes on the issue.

Tensions spiked in April when Australia infuriated China by calling for an independent probe into the origins of the coronavirus pandemic, which emerged in the Chinese city of Wuhan late last year.