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

Lester Mason
November 11, 2018

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.

Australian public broadcaster ABC News said centerpiece of the new Australian prime minister's thinking would be a 2 billion Australian dollar (€1.3 billion) infrastructure bank for the Pacific.

But China's growing ties, including substantial low-interest loans to some countries, have prompted concerns in Canberra that small nations such as Vanuatu or Tonga may fall into a debt trap and are unable to repay loans and may become politically indebted 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.

Australia will set up a permanent Defence Force training team for the Pacific, and increase its Navy deployments and exercises.

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. Extra diplomatic missions would be opened in French Polynesia, the Marshall Islands, Palau, Niue and the Cook Islands.

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

"Australia is reacting to what China is doing".

But amid a growing trade spat between the USA and China, Payne's visit was an opportunity for Canberra to leverage its economic relationship.


It is rare for foreign officials to publicly chastise China over its human rights record during a visit to the country.

Australia's foreign minister raised China's internment of Uighur minorities in Xinjiang at a meeting with her Chinese counterpart on Thursday as Beijing comes under increasing worldwide scrutiny over its controversial security policy.

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 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".

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.

Mr Wang signalled that Beijing was committed to continuing the recent thaw in relations.

Ms Payne later told reporters: "We've realistically acknowledged today that in a relationship as dynamic as ours. there will be from time to time differences".

Other reports by Iphone Fresh

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