Alliance to test China’s resolve in Pacific

China and an alliance of Australia, Japan and the US have flagged competing deals to win support in the region.

Chinese President Xi Jinping and PNG Prime Minster Peter O’Neill yesterday at the unveiling of a Chinese-funded road project in Port Moresby. Picture: AFP

The strategic battle to secure ­geopolitical and military dominance in the South Pacific has erupted ahead of this weekend’s APEC summit, with China and an alliance involving Australia, Japan and the US flagging competing multi-billion-dollar infrastructure deals to win the support of regional leaders.

Chinese President Xi Jinping yesterday raised the stakes in the communist nation’s pursuit of ­influence in the Pacific, inking a soft-loan deal with Papua New Guinea and approving a $US1.5 billion mining project in Australia’s nearest neighbour.

Mr Xi, who made his first state visit to PNG and met pro-China Pacific island leaders last night, was treated to a military honour guard and a 21-gun salute in Port Moresby.

He opened a new six-lane ceremonial road promising “many more roads to prosperity, openness and friendship” in the region.

The Chinese power play, which included the signing of an eight-page memorandum of understanding with PNG Prime Minister Peter O’Neill, came ahead of the arrival of Scott Morrison and US Vice-President Mike Pence today.

The Prime Minister yesterday met his Japanese counterpart, Shinzo Abe, in Darwin and in a powerful sign of growing strategic intimacy, the two leaders committed to concluding their military Reciprocal Access Agreement by early next year.

This agreement, which was subject to intense negotiation at the joint defence and foreign ministers’ meeting last month, will allow much greater military co-operation, joint exercises and ­mutual access by the two nations’ military forces. It could raise the ire of Beijing — it is similar to a Status of Forces agreement with other nations.

Because of Japan’s quasi-­pacifist constitution, it is a difficult and complex agreement. It has theoretically been under discussion for some years. Japanese and Australian prime ministers have never before committed to a firm timeline for its conclusion. Its inclusion in the joint statement indicates that it is now near completion, and it will be viewed unfavourably in Beijing, which ­already sees Japan and Australia as involved in something ­approaching a quasi-alliance.

Mr Xi receives a military honour guard yesterday. Picture: AFP

Mr Morrison and Mr Abe also pushed back against aggression in the South China Sea and pledged enhanced regional co-operation in the Pacific.

In a joint statement last night, Mr Morrison and Mr Abe “reiterated their commitment to international law and its importance in maintaining peace and stability” in the South China Sea.

The two leaders reiterated the importance of freedom of navigation and overflight and of upholding the rules-based regional and international order. They urged all parties “to pursue demilitarisation of disputed features and to fully respect legal and diplomatic processes without resorting to the threat or use of force”.

They also pledged to remain in “close communication” about the situation in the East China Sea, and expressed opposition to “any coercive unilateral actions that seek to alter the status quo or ­increase tensions in the area”.

The Australia-Japan-US infrastructure partnership is viewed as a major pushback against Mr Xi’s moves to expand China’s footprint in the Pacific. As revealed in The Australian this week, the three ­nations and other Western countries including South Korea and New Zealand will announce a major infrastructure package to deliver internet and electricity to 70 per cent of people in PNG.

With further Chinese announcements expected this weekend, Mr Morrison will today hit back at debt-driven diplomacy and poor-quality projects in the region.

“Australia welcomes investments from all development ­partners that support sustainable development, and respond to the priorities of Pacific governments, more than any country in our ­region,” he will tell the APEC Business Advisory ­Council.

“We want to see infrastructure investment that is transparent, non-discriminatory and open; upholds robust standards to deliver long-term benefits; meets genuine needs; and avoids unsustainable debt burdens.”

Mr Abe said “regardless of whether a nation is large or small, all nations should be benefiting from the opportunity to prosper together”.

“And for that to happen, we must protect free and open waters and skies,” he said.

“We have to make this Indo-Pacific region a place where there is solid rule of law, which is open to anyone.

“And we will spare no effort in order to realise such a vision. We will strongly assist quality infrastructure ­build-up.”

Mr Abe said in order to “realise sustainable growth through stronger connectivity of the ­region”, infrastructure development must be promoted to “international standards covering transparency, openness, economic soundness as well as debt-sustainability of the recipient countries”.

“Japan, Australia and the US will continue to closely co-operate with each other under such a goal,” he said.

Mr Morrison, who will host all South Pacific leaders at a barbecue tomorrow, will also deliver an implicit rebuke for the US, saying “tit-for-tat protectionism and threats of trade wars” were in no country’s interest, and undermined the global trading order.

In Port Moresby, Mr Xi and Mr O’Neill agreed to establish closer ties between China and PNG through infrastructure investment, trade and technical co-­operation.

A key item in the agreement allows for reciprocal visa-free travel for PNG politicians and diplomats to China — which Australia does not offer — while China also committed to starting work on a new university in Mr O’Neill’s home province. PNG declared a public holiday for the Chinese President’s visit, and decorated the capital with hundreds of red flags and giant signs welcoming Mr Xi.

The new China Development Bank loan facility includes a three-year repayment holiday and must be used for China-approved projects. Its value was not included in the document, but PNG Deputy Prime Minister Charles Abel said $US300 million had already been drawn down from the facility.

The document also gives the go-ahead for a $US1.5bn extension of the majority Chinese-owned Ramu nickel mine.

Mr Xi later met behind closed doors with the leaders of the seven Pacific island nations that have diplomatic relations with China — Fiji, Cook Islands, Samoa, Tonga, Vanuatu, Federated States of Micronesia and Niue.

Additional reporting: Amos Aikman