When I wrote extensively late last year on the plans by a Chinese state owned fishing company to build a port and "fisheries factory" on Daru, the town closest to Australia, one question I was frequently asked was whether it was just targeted because of its closeness to Australia or part of a wider China strategic plan for the whole Pacific.
At the time I was certain it was the former and quite possibly the latter as well.
I am increasingly of the view that it is definitely part of a strategic plan by China to expand its Pacific presence, and influence. Of course it is designed to irritate Australia, and undermine our influence in Papua New Guinea something China has most certainly given more focus as our relations with the PRC has deteriorated.
But in this contribution I will outline my reasons why I believe China's Pacific strategies are being significantly stepped up – and the Daru project is a part of that – across the Pacific.
We know already that China has a policy of building ports and airports in countries in South East Asia, and Africa, and funding the construction by PRC loans that in most cases the countries signed up to them can hardly afford to honour.
That does not really worry China, which funds these projects through state owned banks such as Exim. If a country that signed up to a loan cannot repay, then China takes over the facility. That has already happened with a major port in Sri Lanka which the government defaulted on. China now has a 99 year lease over the port.
This one example, and there are others in Africa, is why China's strategic port and airport plans across the Pacific must cause Australia and its allies, such as New Zealand, Japan and the United States, concern if not alarm.
The Daru project is yet to actually commence construction. But it continues to be actively promoted by the PRC Embassy in Port Moresby.
Meanwhile we know that China some year ago signed one of our close neighbours, Vanuatu, up to a major port project comfortably capable of berthing a large warship. The project, funded by a loan to the Vanuatu Government is operational and surprise surprise it is proving to be quite uneconomic.
It is probably only a matter of time before Vanuatu defaults on this loan, or on other loans with the PRC. If it does, China may take control of the port – located quite close to Australia.
In the recent Samoa elections one of the key issues was the decision by the pro-China government to award a contract for a major port in Samoa to a Chinese company, funded by a PRC loan.
The opposition alliance won the election but at the time of writing the government that has been in power for 40 years had not vacated office. When it does so one of the first decisions of the new government will be to cancel the port project, worth more than $100 million.
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