Why PNG is now China’s number one priority

The other reason why China now focusses on PNG ahead of small island nations – with the exception of the Solomon Islands which also recently reached a range of agreements to strengthen economic "co-operation".

One of the goals is to attract 90,000 Chinese tourists! That number would swamp the economy.

I believe China has decided that it just cannot rely on the small economies of countries such as Tonga and Samoa. Both are already having difficulty repaying existing loans.

If PNG defaults China would have the right to taken over assets it has funded – just as it has done in Sri Lanka.

In summary, focussing on a broadly based and resource right economy like PNG offers China greater opportunities and the capacity to take over assets if PNG defaults.

The scenario I have outlined is not unrealistic. A compliant PNG Prime Minister facing re-election is not an obstacle at all.

From Australia's point view it is a truly alarming scenario. And there is nothing we can do about it directly challenge China's expansion.