China shuns rivalry in Pacific as Australia says 'this is our patch'

French President Emmanuel Macron former Australian Prime Minister Malcolm Turnbull and Foreign Minister Julie Bishop on the deck of HMAS Waller

Australia's prime minister has outlined the country's plans to increase investments in infrastructure in the South Pacific as China's influence in those nations grows.

Relations have been decidedly frosty for the past two years; China reacted angrily to allegations of undue influence in Australian affairs, while Australia objected to a Chinese campaign to lay the groundwork for military bases in Pacific Island countries.

Declaring a "new chapter" in relations with the Pacific, Mr Morrison unveiled plans to establish a A$2 billion infrastructure bank to issue grants and long-term loans for telecommunications, energy, transport and water projects.

Ties between the two countries have been strained since Australia accused China of meddling in its domestic affairs late a year ago.

A $2 billion Pacific infrastructure fund is Scott Morrison's centrepiece of a new push to make the island nations the main priority of Australia's foreign policy.

On her part, Payne said Australia does not regard China as a military threat and welcomes China's stepping up investment, according to Xinhua.

Australia has also banned Chinese telecommunications giants Huawei and ZTE Corp. from new telecommunications projects, and an Australian security think tank has raised concerns about increasing collaboration between Australian universities and China's People's Liberation Army scientists on research programs such as hypersonic missiles and navigation technology.

Australia will also strengthen its links with police forces in the Pacific.


Australia will also give an additional A$1 billion to its financing arm, which offers loans to private companies unable to secure funds from traditional lenders, to invest in the Pacific.

Australia's diplomatic network is already larger than any other country in the Pacific, but Mr Morrison said it will be expanded with posts in Palau, the Marshall Islands, French Polynesia, Niue and the Cook Islands.

He said the ship could assist with preparation for and response to natural disasters and other resiliance support.

As previously reported here on Business Times, political experts attributed Australia's growing economy on the country's strong trade relations with China.

The U.S. charge d'affaires to Australia, James Carouso, said the three Pacific defense allies were negotiating with the impoverished South Pacific island nation of 8 million people, mostly subsistence farmers, on its internet contract.

On Wednesday, Australia said it intends to block a Chinese and Hong Kong consortium's 13 billion Australian dollar ($9 billion) bid to take over the APA group.

Notably, Wang mentioned that China appreciates Australia for "its support for and active engagement" in the first China International Import Expo held in Shanghai - an event Chinese top authorities created to "bolster China's image as an open market".

"Instead, China welcomes more quality goods from Australia entering the Chinese market", he said.

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