Australia launches $1.5 billion Pacific fund to counter China's influence

By Colin Packham

 

FILE PHOTO: The new Australian Prime Minister Scott Morrison attends a news conference in Canberra, Australia August 24, 2018. REUTERS/David Gray

 

SYDNEY (Reuters) - Australia will offer Pacific countries up to A$3 billion ($2.18 billion) in grants and cheap loans to build infrastructure, Prime Minister Scott Morrison said on Thursday, as Canberra seeks to counter China's rising influence in the region.

 

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 $1.3 billion on concessional loans and gifts since 2011 to become the Pacific's second-largest donor after Australia, stoking concern in the West that several tiny nations could end up overburdened and in debt to Beijing.

 

"The government I have the privilege to lead, is returning the Pacific to where it should be; front and centre," Morrison said in a speech announcing the new Pacific initiative.

 

"This is our patch. This is our part of the world." Morrison said Australia will create a A$2 billion infrastructure fund that will invest in telecommunications, energy, transport, water projects. 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.

 

Morrison said Australia would also expand its diplomatic presence in the Pacific, posting staff to Palau, the Marshall Islands, French Polynesia, Niue and the Cook Islands.

 

Australia said it will also strengthen defence and security ties with Pacific islands through new joint exercises and training.

 

While Morrison did not name China in his most detailed foreign policy speech since he become Australia's sixth prime minister in the last decade in August, few were in doubt as to who the policy was aimed at combating. "Australia is reacting to what China is doing.

 

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. Ties between Australia and China, its largest trading partner, have been strained since Australia accused China of meddling in its domestic affairs late last year.

 

"This announcement will be a gauge of whether Australia can improve relations with Beijing while doing things that would have previously annoyed China," said Nick Bisley, professor of international relations at Melbourne's La Trobe University. Australia's Foreign Minister Marise Payne will on Thursday meet her Chinese counterpart in Beijing, the first visit by an Australian foreign minister in two years after bilateral relations soured.

 

Australia has in recent months earmarked the Pacific for infrastructure spending, driven by national security concerns, but it has been forced to raid its aid budget to fund projects.

 

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 [HWT.UL].

 

Earlier this month, Australia said it would help PNG develop a naval base, beating out China as a possible partner for the port development. Diplomatic sources told Reuters Australia was worried the port could accommodate military vessels in strategically important waters.

 

(Reporting by Colin Packham; Editing by Leslie Adler and Michael Perry)

 

-- © Copyright Reuters 2018-11-08

5 minutes ago, webfact said:

"This is our patch. This is our part of the world."

Yes, obviously Australia’s incredibly long history and influence far outstrips China’s historical presence in the region ????????????????

 

Does Aus. seriously think it can compete with China in spending money? Do regular Australians think that this is money well spent?

it's been tried by countries with a lot deeper pockets than Australia..

30 minutes ago, from the home of CC said:

it's been tried by countries with a lot deeper pockets than Australia..

No choice but to try.

Create $2 Billion infrastructure for them and do a $12K handout for each Aussie battling on their farm...

There is either a big dust up coming, or they are bum kissing the UN again....Australia should pull out of the UN completely.

Well done - beat the CHINESE at their own game!

2 minutes ago, weegee said:

Create $2 Billion infrastructure for them and do a $12K handout for each Aussie battling on their farm...

There is either a big dust up coming, or they are bum kissing the UN again....Australia should pull out of the UN completely.

This has NOTHING to do with the UN.

Then why is Australia selling major tracts of land to the Chinese? ????

This is not going to help Australia’s trade with China....

There goes the iron ore and mineral market....this is going to cost them.........way more than a couple of billion.....

Too little and too late. Over the last five years Australia facilitated the China alternate by withdrawing direct funds and funding for projects. Classic example of short term thinking.

Just now, namatjira said:

This is not going to help Australia’s trade with China....

There goes the iron ore and mineral market....this is going to cost them.........way more than a couple of billion.....

The art of diplomacy is eating your cake and having it. Something which Trump doesn't understand (only 'I win/you lose' as far as he's concerned) but the Chinese are sophisticated enough to understand win/win, as long as you're NICE to them in public. Not much different from the Thais in that regard.

12 minutes ago, mfd101 said:

The art of diplomacy is eating your cake and having it. Something which Trump doesn't understand (only 'I win/you lose' as far as he's concerned) but the Chinese are sophisticated enough to understand win/win, as long as you're NICE to them in public. Not much different from the Thais in that regard.

This thread is about China and Australia

Why mention Trump , this has nothing to do with either him or the USA

40 minutes ago, sevenhills said:

Then why is Australia selling major tracts of land to the Chinese? ????

aussies are fund raising to get money together to give to the pacific nations. aussie logic. as a kiwi I find it confusing. sheep are more simple.

1 minute ago, wombat said:

the real problem is sharia law/islam doing to oz what it has done to UK with only 5.6% of the population being sharia law/islam.
China is not the problem. the left are using this as an excuse to blindside us to sharia law/islam

Yes, conspiracies everywhere.

1 hour ago, sevenhills said:

Then why is Australia selling major tracts of land to the Chinese? ????

no one in Australia 'owns' land...it is leased from the govt...as recent history can show you the govt is not backwards in coming forwards to terminate leases when they want the land back.
just to reiterate...
no one in Australia 'owns' land...it is leased from the govt.

And they will not give a part pension (all of $50 per fortnight) because I live in Thailand. Maybe I should move to a Pacific island. Who makes this stuff up.

With the U.S. trade deficit with China riding at $350B per year, along with all other western countries adding more to that, they don't need to fight us. China can buy any corner of the world they want. Cash.

Two things leap to mind, firstly, stop non Australian citizens buying our country and secondly, use the money for our suffering farm sector you <deleted> barstewards. 

40 minutes ago, rosst said:

Two things leap to mind, firstly, stop non Australian citizens buying our country and secondly, use the money for our suffering farm sector you <deleted> barstewards. 

Ah yes, perhaps the Australian government could seek lessons from the Thai government ...

11 hours ago, mikebike said:

Yes, obviously Australia’s incredibly long history and influence far outstrips China’s historical presence in the region ????????????????

 

Does Aus. seriously think it can compete with China in spending money? Do regular Australians think that this is money well spent?

You sound like a China man

Like shutting the gate after the horse has bolted. China has checked Australia as China has checked NZ in Tonga Niue . Too little too late I am afraid

Knee jerk reaction , our nearest neighbour PNG has been overrun already, dominating the bottom end retail sector , already a foothold into mining and corrupting the government, in 15 years time it will control PNG be it overtly or otherwise.

Sent from my Redmi Note 6 Pro using Thailand Forum - Thaivisa mobile app

14 hours ago, namatjira said:

This is not going to help Australia’s trade with China....

There goes the iron ore and mineral market....this is going to cost them.........way more than a couple of billion.....

Poke them in the eye. Who really needs that $38b(Aust) trade surplus with China. I just checked our inventories. Iron ore covered, met. coal covered, LNG building new port then covered, grains covered, gold covered, .......

On 11/8/2018 at 9:06 PM, Mad mick said:

You block the import of fruit from overseas. In NZ a kilo of bananas is about NZ$2.40 how much in Australia. Thats why you import from outside the same as other Countries

Absolutely hilarious, China already own major ports and airports in Australia.  Let's not forget they own a huge amount of the farms in Australia.  They almost own the country.  I'm chinese decent so no problem for me

Those of us who are retired in Thailand & whose income comes entirely from Oz should remember that (1) it is selling to China + Chinese investment in Oz that has kept Oz more than comfortably afloat for the last decade or more, and (2) it's Chinese migrants to Oz working harder & getting richer than most Australians & paying their taxes that keeps us in clover in our old age.

On 11/8/2018 at 4:24 PM, sevenhills said:

Then why is Australia selling major tracts of land to the Chinese? ????

In preference to Australian purchasers offering a higher value at that !

Water resources allowed in preference to  Australian land holders!

Strange days!