Australian Prime Minister Scott Morrison (photo: ALEX ELLINGHAUSEN)

He said all states and territories should not be entering into agreements inconsistent with Australia's foreign policy.

The deal with Victoria would allow for Chinese investment in the state and for Victorian companies to participate in Chinese government projects overseas.The framework is not just about infrastructure, it also talks about exploring industrial co-operation in areas of biotechnology, agriculture technology, agricultural products, food, and cosmetics.

Peter Dutton, Home Affairs Minister, has asked Victoria to show a “greater level of transparency” around the details of the agreement with Beijing.