Australia, US, Japan to offer infrastructure lending in Asia-Pacific region

Australia will work with the US and Japan to offer an alternative to China’s massive infrastructure lending in Asia and the Pacific, Julie Bishop says.

Australia's Foreign Minister, Julie Bishop speaks during a press conference at the annual UK-Australia (AUKMIN) talks in Edinburgh on July 20, 2018. The Annual AUKMIN talks celebrate the UK's historic relationship with Australia. / AFP PHOTO / POOL / David Cheskin

Australia will work with the US and Japan to offer an alternative to China’s massive infrastructure lending in Asia and the Pacific, Foreign Minister Julie Bishop has announced.

The minister’s department will work with the United States Overseas Private Investment Corporation and the Japanese Bank for International co-operation to help regional nations build infrastructure and contribute to economic development.

Australia and the US have been vocally critical of China’s lending in the region, particularly to small and unstable states.

International Development Minister Concetta Fierravanti-Wells made international headlines after she told The Australian early this year that China was building “useless buildings” and “roads to nowhere”, forcing small Pacific Island nations into unsustainable debt.

Now Ms Bishop said the three nations would use the partnership to further their “free and open Indo-Pacific” policies, which is code for ensuring the region is ruled by post-WWII international laws and norms, rather than a China-led order.

“The United States, Japan, and Australia have formed a trilateral partnership to mobilise investment in projects that drive economic growth, create opportunities, and foster a free, open, inclusive and prosperous Indo-Pacific,” Ms Bishop said.

“We share the belief that good investments stem from transparency, open competition, sustainability, adhering to robust global standards, employing the local workforce, and avoiding unsustainable debt burdens.”

Ms Bishop said the investment will be in infrastructure, such as energy, transportation, tourism, and technology.

The US OPIC is also placing a representative in the US Embassy in Japan, Ms Bishop said.

The foreign minister said Malcolm Turnbull signed an MOU with OPIC when he was in Washington earlier in the year.