SYDNEY—Australia said it would establish a development fund and offer Pacific island nations more than $2 billion for infrastructure projects while bolstering military cooperation, as U.S. allies take a more assertive stance against China in the region.
Also Thursday, Australia said it would open new diplomatic posts across the Pacific, while New Zealand announced new funding to boost cultural engagement with small Pacific states.
The U.S. and its allies are increasingly coordinating to counter what officials in Washington and elsewhere see as Beijing’s attempts to gain influence over smaller nations through infrastructure loans under its Belt and Road initiative. Last month President Trump signed the Build Act, which expands American development financing for private companies to up to $60 billion.
“Australia has an abiding interest in a southwest Pacific that is secure strategically, stable economically and sovereign politically,” Prime Minister Scott Morrison said in a speech to soldiers at a military barracks. “This is our patch.”
At a mega-trade show in China, global businesses and political leaders were looking for hints of Xi Jinping’s strategy ahead of planned trade talks with President Trump. Photo: Reuters
The program of loans and grants—a $1.5 billion infrastructure facility and around $700 million in capital for the export-financing agency—will prioritize critical telecommunications, energy, transport and water projects, Australia said. Canberra also plans to establish a mobile defense-training team to help Pacific nations upgrade their militaries and improve peacekeeping and disaster-response capabilities.
Asia-Pacific leaders will meet next week in Papua New Guinea, where China’s President Xi Jinping is expected to open Beijing’s pocketbook. Commitments over the past year, if realized, would make China the second-largest donor behind Australia in the Pacific region, which the U.S. and its allies have dominated since World War II.
Beijing, which says its goal is to help Pacific countries achieve peace, stability and prosperity, has urged other countries to “discard the Cold War mentality” and view its relations with Pacific states in an objective way.But old Western allies are concerned about its intentions toward impoverished island nations whose strategic value outstrips their size and wealth.
The U.K. recently announced three new diplomatic posts in the Pacific, while France gained a de facto seat in a key regional group—the Pacific Islands Forum—when its Pacific territories joined.
Australia said Thursday it would open diplomatic missions in Palau, the Marshall Islands, French Polynesia, Niue and the Cook Islands. New Zealand said it would create a $6.8 million fund to deepen engagement with Pacific states on military, cultural and sports matters.
In September, a senior U.S. official said the U.S., along with Japan and Australia, is vying to build an internet network in Papua New Guinea to block a Chinese telecom company.
“We’ve seen a growing concerted effort to really up the game and compete with China head-on in the Pacific,” said Jonathan Pryke, director of the Sydney-based Lowy Institute’s Pacific Islands program. “The picture is slowly forming of the growing cooperation between Australia, the U.S. and Japan.”
Last week, Australia announced it would redevelop a South Pacific naval base in Papua New Guinea, which would likely give U.S. and Australian forces greater access to the southern approaches to the disputed South China Sea.
Australia is also taking a cautious approach to Chinese investment in strategic sectors at home.
On Wednesday, the country’s treasurer said he was prepared to block a $9 billion takeover of Australia’s largest gas-pipeline operators by Hong Kong-based
over concerns that the deal would place too much power in the hands of a foreign investor.
And in Beijing on Thursday, visiting Australian Foreign Minister Marise Payne said she had registered concerns with her Chinese counterpart over China’s internment of Muslims in the country’s northwest. She didn’t elaborate on the discussion.
Write to Rachel Pannett at [email protected]