Australia details investment in South Pacific infrastructure

Navy personnel on parade during a commissioning ceremony for HMAS Brisbane in Sydney last month

Navy personnel on parade during a commissioning ceremony for HMAS Brisbane in Sydney last

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Australian Prime Minister Scott Morrison on Thursday (Nov 8) announced a A$3 billion (S$2.99 billion) package to boost ties with Pacific island nations amid growing concerns about China's growing influence in the region.

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. "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.

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

But Mr Morrison attempted to play down suggestions that the new measures in the Pacific were aimed at China.

Mr Morrison will announce new diplomatic missions in Palau, the Marshall Islands, French Polynesia, Niue and the Cook Islands.

He will ask Parliament for an extra $1 billion in callable capital to Australia's export financing agency for investments in the region that have a "broad national benefit" for Australia.

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. "This is where we have special responsibilities", he said. In the aftermath, China froze Australian ministerial visits for about a year.

Speaking after a meeting in Beijing with Chinese Foreign Minister Wang Yi that marked a thaw in recently chilly relations, Payne stressed "the importance of Australia's welcoming of Chinese investment in Australia".

"We are getting on with business with China", he told reporters.

"It is imperative for the two sides to re-establish political mutual trust, so as to consolidate the basis for bilateral relations", Wang said, voicing the hope that Australia correctly understands and treats China's development path and its strategic intentions, working to wipe out "mutual trust deficit".

Earlier this month, Australia said it would help PNG develop a naval base, beating out China as a possible partner for the port development.

It is understood the speech will make no explicit mention of China but the "reorientation" would go some way to countering the largesse flowing into tiny nations such as Fiji, Tonga, Vanuatu and the Solomon Islands from Beijing.

They met just hours after Australia revealed that it was likely to block the A$13 billion takeover by a Chinese firm of Australia's largest gas pipeline business.

"While China and Australia do not always agree, it is vitally important that we always match our words with actions", he said.

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