Xi Jinping’s landmark Belt and Road Initiative suffered two major setbacks in the Western world this past week.

The first occurred in Australia, where the federal government nullified two deals previously agreed to by the state of Victoria under the banner of Belt and Road. The deals – a 2018 memorandum of understanding (MoU) signing Victoria up to BRI and a 2019 framework agreement pledging increased involvement by Chinese infrastructure companies in state projects – were lacking in specific details and neither was legally binding. However, they were expected to narrow in on the project level in 2020 before the COVID-19 pandemic derailed the process (and the bottom fell out of Sino-Australia relations).

The decision marked the first time that new federal powers to scuttle state- and territory-level deals on the basis of national security were used. This authority is relatively new, stemming from the Foreign Arrangements Scheme, which came into force in December 2020. The Scheme obligates sub-sovereign governments and public universities to notify the minister of foreign affairs whenever having entered into an agreement with a foreign government or entity.

The Australian government maintains that the decision was not targeted at China specifically, pointing to the fact that two other deals involving other states were cancelled at the same time. However, those other deals – a MoU on education exchanges between Victoria and Iran circa 2004, and one pledging scientific cooperation with Syria circa 1999 – clearly carried far less significance in the current geopolitical context, and as such were likely included as a face-saving measure.