23 Oct 2017

'Strategic' risks to Australia from China trade plan

12:13 pm on 23 October 2017

A controversial trillion-dollar push by China to dominate global trade is being resisted by senior national security figures in Australia who warn of serious "strategic" consequences if Australia formally signs up.

Cargo containers wait to be transported at a port in Qingdao

Cargo containers wait to be transported at a port in Qingdao Photo: AFP

The ABC has confirmed the heads of the immigration and defence departments were among those opposed to Beijing's ambitious 'One Belt, One Road' initiative, firmly advising the Turnbull Government earlier this year not to join it.

Several government sources said the Chinese plan also provoked a schism inside the Department of Foreign Affairs and Trade, with trade bureaucrats broadly in favour of joining while the diplomatic corps was reticent.

So far, 68 countries including New Zealand have signed up to the signature project of Chinese President Xi Jinping, which marks his nation's plans to expand its power in the region and beyond.

"The economic case for Australia formally joining simply wasn't made," a senior government figure said.

"We saw very little in additional economic benefit for signing up, but a lot of negative strategic consequences if we accepted Beijing's offer."

Under the massive plan first unveiled in 2013, China wants to revive an ancient network of land and ocean silk trade routes and has already spent billions of dollars on new infrastructure projects for roads, railways, ports and maritime corridors.

The land-based projects are the 'belt' while the 'road' is made up of maritime routes that will connect China's southern provinces to South-East Asia and the east coast of Africa with ports and railways.

Department bosses warned against project

At the start of this year federal ministers closely examined and rejected a Chinese investment proposal which linked the Australian government's plans for northern Australia to the Belt and Road Initiative.

Several government sources have confirmed Immigration Department secretary Mike Pezzullo and then Defence Department boss Dennis Richardson warned against Australia joining the project because of "strategic" concerns.

Their advice came as the federal Cabinet met to formalise Australia's response to Mr Xi's One Belt, One Road strategy.

Mr Richardson retired in May.

The ABC understands numerous other senior figures in Australia's national security community were also opposed to the idea, believing it unwise to deepen Australia's dependence on China.

China expert Nick Bisley from La Trobe University said he believed Australia's public position on the Belt Road Initiative has so far been muddled and confused.

"The challenge is to say how do we show a little bit of scepticism and caution without necessarily saying, 'Everything you do, China, must be seen as a threat to our national security,'" Dr Bisley said.