The immediate challenges AUKUS faces in our immediate region

While the immediate focus and coverage the AUKUS pact is on the shift to nuclear powered submarines for Australia, the enormous and growing challenge China's expansionist approach in our immediate region must be addressed comprehensively and urgently.

In this contribution I want to try and summarise the full extent of China's prevailing interest in the South Pacific nations of greatest strategic importance to Australia – Papua New Guinea, The Solomon Islands, and Vanuatu – as well as look briefly at China's presence in Kiribati in the Central Pacific, and Timor Leste to our immediate north.

Last week I wrote about the Noble Center building in Port Moresby, China's flagship project in Papua New Guinea. Since then I have been deluged with other examples of failed and dubious China projects in PNG, some under the Belt and Road initiative and some as part of direct agreements with provincial governments and state owned corporations.

The most troubling, but unsurprising, is confirmation that China, through the PRC Embassy in Port Moresby and state linked corporations, is pushing ahead with a number of projects in the Western, or Fly River, Province, which has a sea border with Australia, and a land border with the Indonesian Province of Papua.

Last year I wrote extensively about China's plan to build a "fish factory" and large port in Daru, which is just a few kilometres from the Australian islands in the Torres Strait. My latest information is that the project is NOT dead at all, and is in fact being pursued by the PRC embassy, and fisheries companies, with the provincial and local level government in the Western Province.

The Western Province has become the most immediate focus of China's engagement for now in PNG. In discussions with provincial and local officials, a figure of K!0 billion (about $A3.7 billion) for infrastructure and other projects under the "Belt and Road" program have been suggested. Loans to that extent would bankrupt the province and would require national government involvement and guarantees.

The Chinese presence right across the Western Province is substantial – motels, retail outlets etc. The provincial government has moved its Daru offices from state owned property to a building owned by a Chinese company!

Australia has simply not given enough attention, or priority, to Daru and the Western Province as a whole. Nothing short of a multi-billion dollar investment in health care, education, infrastructure and lifting the living standards of the people of the province, and especially Daru, will go even half way to meeting the growing China challenge.

Elsewhere in PNG, the China presence is on the march. The PNG construction industry has been decimated by the domination now enjoyed by China construction companies. The capacity of local businesses, and even the once strong Australian construction sector, to tender for government and state owned corporation work is just about extinguished.

The Asian Development Bank inexcusably continues to pursue contracting processes that favour Chinese companies, led by China Railway Construction. From what I can see PRC companies now win virtually all ADB-funded work, despite the fact the largest ADB contract, the redevelopment of Lae Port, was judged even by the ADB itself to have been a "failure".

Australia has been a "failure" when it comes to requiring the ADB, of which Australia is a senior member, to end the PRC construction sector stranglehold, and give a "fair go" to PNG and Australian companies.

Right across PNG the China presence is growing almost daily. In a number of communities gated and heavily secured compounds housing Chinese workers and their families have been built. More are on the way.