China has lost significant ground in our region

Readers will recall that a year ago in this column I was really concerned at China's rapidly growing influence in our region.

I'm pleased to report a significant change in the regional outlook. China's influence has not ended, but it has certainly slowed down...especially on security issues.

A year ago I was really concerned about a close neighbour, Vanuatu falling under significant Chinese influence.

A new Government in Vanuatu has changed that, as evidenced by the successful visit by the new Vanuatu PM to Canberra on Wednesday. A security agreement is on the agenda as well as stronger trade and investment links.

I was also concerned at the direction of Fiji.....which seemed to be embracing much stronger ties with China - at the expense of Australia and New Zealand.

Again a general election and a change of government has changed the outlook significantly.

The new PM, Sitiveni Rabuka campaigned openly against closer engagement with China. He has begun implementing this commitment.

A visit to Canberra and a possible security agreement are on the cards. More Australians are holidaying in Fiji post the worst of the pandemic. Greater Australian investment is likely.

China has made some serious diplomatic blunders that highlighted its relative inexperience in the South Pacific of this era.

An attempt to play "divide and rule" in the Pacific Islands Forum backfired spectacularly.

China wanted a majority of island nations to sign up to a security agreement with China.

Initially Kiribati fell into line and broke away from the Forum, but some skilful diplomacy, including by Australia under Foreign Minister, Penny Wong, has seen Kiribati commit to returning to the Forum.

Perhaps the biggest setback came when Papua New Guinea committed to a comprehensive defence and security agreement with Australia. A highly successful short visit to PNG by Prime Minister Anthony Albanese, backed up by the Foreign Minister, achieved what will be a good outcome for Australia.

The Marape Government will have incurred the ire of China on a range of issues. The PNG Foreign Minister has played a key role in bringing Australia and Papua New Guinea as close as we have been for a generation.

The only country where China continues to have real and growing success is the Solomon Islands.

The removal of the anti-China Premier of Malaita undoubtedly has Chinas finger prints over it.

A general election is overdue in the SI. The Sogavare Government, backed strongly by China, has been delaying national elections. It cannot continue to do so....much as Sogavare himself will try!

What continues to concern me about China's influence is its trade and economic dominance in key areas in a number of countries, most notably Papua New Guinea.

China has an absolute stranglehold over log exports from PNG. It also dominates when it comes to seafood imports...and a growing share of the import of PNG's agricultural exports.

Indeed, it now dominates seafood imports from many island nations with limited downstream processing.

With regard to PNG, the Papuan Region remains very vulnerable to Chinese influence through plans for Chinese sourced and managed projects especially on Daru, the closest community to Australia, and the Kikori-Ihu economic zone project, which China has provided initial funding for.

We need to do more to promote Australian interest in the Papuan Region. It must be our highest priority.

China is well placed to acquire full control of the Porgera Mine if Barrack loses patience and decides to exit.

China is probably interested in the Wafi Mine project currently controlled by Newcrest.

Our regional diplomacy in recent months has delivered some very good results. China has lost ground.

But we cannot assume it won't refocus- I suspect it will focus on economic opportunities to do so.

Our diplomatic efforts have delivered.

The focus must now be on economic links......and especially greater business engagement.

It's one area we just not have not done enough in. A window of opportunity has opened up.

Business and investment must not be neglected as we build on our success, not just in PNG but across the region.