China’s PNG focus is clearly aimed at Australia

The outcome of the visit to Papua New Guinea last week by the PRC Foreign Minister is about as transparent as one would expect - totally devoid of anything more than the usual meaningless statements about helping PNG with infrastructure and trade and just about every other area of government activity.

The statements from the Marape Government were no different - in fact they read as though they were written by the PRC Embassy!!

But what is clear to me is that China has shifted its priorities in Papua New Guinea in a way that must alarm the Australian Government and the people of Australia.

If one looks back a decade China's focus in PNG was in the Momase region - the northern coast of the PNG mainland. It was the major investor in the Ramu nickel mine, it was interested in developing several fish processing plants, an industrial zone at Madang, the redevelopment of the port of Lae, the expansion of the Ramu hydro power project, and maybe a wharf on Manus.

Fast forward to the visit last week.

Just two specific projects have emerged. BOTH are on the Papuan Coast, with obvious proximity to Australia.

A statement by the project manager of the Ihu Special Economic Zone confirms that the PNG Foreign Minister committed the Chinese Government to promote and help fund the economic zone, a project it committed K80 million to earlier this year.

There are two specific reasons why China is committed to what is an ambitious project - attracting industry to a remote and undeveloped part of Papua New Guinea is an interesting challenge, to put it mildly.

The first reason is a purely political one. The principal proponent of the project is the local MP, Soroi Eoe, who happens to be the Minister for Foreign Affairs and Trade in the current PNG Government. He is China's best, but not only, friend in the government.

I am told the initial K80 million grant, not loan, from China has been used to build a road from the coast to inland areas. Roads are politically very popular in Papua New Guinea, so Mr Eoe will be expecting this project will win him votes in the PNG national elections next month. China will be hoping it does also.

The second reason is that the project is strategically located close to the proposed Purari hydro power project - which Andrew Forrest is currently evaluating. It is also close to the potentially lucrative Gulf of Papua oil and gas fields. The pipeline from the major PNG Gas Project in the Highlands is also close by.

But there is a third reason that has not been spoken about. There can be no doubt that the construction of a major wharf at Ihu-Kikori would not please the Australian Government. The area is of strategic significance for Australia. After Daru, Ihu is the closest reasonable-sized community to Australia.