Australia revamps Pacific strategy to reach out to countries as China looms

Nellie Chapman
November 11, 2018

Australia and China have been vying for influence in sparsely populated Pacific island countries that control vast swathes of resource-rich oceans.

China has spent over a billion dollars on concessional loans and gifts since 2011 to become the Pacific's second-largest donor after Australia, stoking concern in the West that nations could end up overburdened and in debt to Beijing.

China has taken offense at new Australian law passed over claims of Chinese meddling in Australian politics, amid caution in Australia over Chinese stakes in telecoms and research projects and China's growing western Pacific naval presence.

"So we have a very special relationship with the Pacific and we need to for our own interest as well as that it's part of the community and family of nations we live in".

The Australian Infrastructure Financing Facility would issue grants and long-term loans for "high priority" projects including telecommunications, energy, transport and water.

For her part, Payne said that a prosperous China bears positive significance to the rest of the world, and Australia does not regard China as a military threat.

There are also plans to strengthen Australia's defence and security ties with Pacific islands through joint exercises and training.

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Australian will also put diplomats in all 18 countries in the Pacific Islands Forum, with new embassies planned in Palau, Marshall Islands, French Polynesia, Nui and Cook Islands. "Australia needs more tools to engage with the Pacific", said Jonathan Pryke, a Pacific Islands foreign policy expert with the Lowy Institute, an Australian think-tank.

Marise Payne spoke after meeting with China's chief diplomat Wang Yi on the first visit to Beijing by an Australian foreign minister in almost three years as both countries pursue a thaw in relations.

While the Pacific has traditionally been seen as Australia's diplomatic turf and is the biggest recipient of foreign aid from Canberra, China has been increasing loans to small, indebted Pacific island nations.

Foreign policy analysts say Australia's new infrastructure fund will test Australia's already cool relations with China, its largest trading partner.

Chinese State Councilor and Foreign Minister Wang Yi and Australian Foreign Minister Marise Payne held the fifth China-Australia Foreign and Strategic Dialogue here on Thursday, with both officials vowing to promote bilateral ties on the basis of mutual trust and win-win results.

In May, Australia said it would spend about A$200 million to develop an undersea internet cables to Papua New Guinea (PNG) and the Solomon Islands amid national security concerns about China's Huawei Technologies Co Ltd.

After the meeting, Wang said China and Australia were "not competitors, not rivals, but partners" in the region.

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