“This is gravely concerning, and Victoria needs to explain why it is really the only state in the country that has entered into this relationship,” Dutton said.

The remarks came after Victorian Treasurer Tim Pallas accused the federal government, led by the centre-right Liberal Party, of “vilifying” China, suggesting its push for an inquiry had led Beijing to retaliate against Australian exporters.

Pallas’ comments drew condemnation from government MPs for “parroting” Beijing, as well as resistance from even some federal members of his own Labor Party.

Although the trade measures are widely seen as punishment for the inquiry, Canberra has refrained from directly linking the two issues and insisted they be resolved separately.

Beijing has denied any link, insisting the measures were introduced in response to quarantine and inspection violations and unfair trade practices.

On Wednesday, Victorian government and opposition MPs clashed over the infrastructure initiative after state Transport Infrastructure Minister Jacinta Allan refused to answer questions on whether A$24 billion (US$15 billion) in new spending to deal with the pandemic would include funds borrowed from China.

Peter Jennings, executive director of the Australian Strategic Policy Institute, said the Victorian government was “undermining a bipartisan position” on the belt and road strategy and stepping beyond its authority into the realm of foreign affairs.

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“The focus of state politicians tends only to be on investment and trade and they have little conception of the downside risks of engagement with the People’s Republic of China,” Jennings said.

“Very few state officials have security clearances or the need to access information from our intelligence agencies and the national security establishment. The result is state and territory governments tend to be incredibly naive when it comes to dealing with the PRC.”

Victoria, home to Australia’s second biggest city Melbourne, sold A$10 billion (US$6.5 billion) worth of exports to China in 2018, more than to any other country, and received more than a quarter of Chinese investment into the country.

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Nick Bisley, a professor of international relations at La Trobe University in Melbourne, said state leaders lacked a “national security perspective” on China and were likely to see even greater need to court new investment due to the trade dispute at the national level.

“These tensions are certainly making states feel as if the government’s focus on the strategic risk of China is putting economic welfare in some states under threat, and as such they are likely to try to do what they can to improve economic ties,” said Bisley. “Given how dire the economic consequences of Covid are likely to be, there will be added incentive to do so.”

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Pradeep Taneja, a lecturer in Chinese politics and international relations at the University of Melbourne, said the Victorian premier saw ties with China from the “parochial point of view” of investment opportunities in part because the state was on a major infrastructure drive, including an expansion of Melbourne’s rail network.

But Taneja said there would be limits to Chinese involvement in projects in the state as the federal government retained a veto over large international investment.

“Premier Andrews knows that – that he’s unlikely to get any major investment from China,” Taneja said, explaining that the state leader hoped to send the message that Victoria was open to trade. “It’s not just about investment, it’s also about the trade relationship.”

The Victorian government was contacted for comment.