1134 GMT January 18, 2019
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, according to Reuters.com.
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 defense 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 becomes Australia’s sixth prime minister in the last decade in August, few were in doubt as to who the policy was aimed at combating.
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.
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 cable to Papua New Guinea (PNG) and the Solomon Islands amid national security concerns about China’s Huawei Technologies Co Ltd.
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.