A secret study warned the Morrison government to radically recast foreign aid spending, including taking direct equity stakes in infrastructure projects and provide loan guarantees for businesses, in a bid to combat China’s “largely contrary influence” in the Pacific and south-east Asia.

The 2019 feasibility study into expanding development financing options prepared for the Department of Foreign Affairs and Trade flagged the need for Canberra to unlock private sector investment to help meet the Indo-Pacific’s huge appetite for infrastructure while achieving crucial geostrategic goals.