$A2b fund for Pacific nations

SYDNEY: Australia will create a $A2 billion ($NZ2.15 billion) fund to provide loans to Pacific nations to build infrastructure, Prime Minister Scott Morrison announced yesterday, as Canberra seeks to counter China’s influence in the region.

Australia and China have been vying for influence in sparsely populated Pacific island countries that control vast swathes of resourcerich oceans.

China has spent $US1.3 billion ($NZ1.9 billion) on concessional loans and gifts since 2011 to become the Pacific’s secondlargest donor after Australia, stoking concern in the West that several tiny nations could end up overburdened and in debt to Beijing.

Foreign policy analysts say Australia’s new infrastructure fund will test Australia’s already cool relations with China, its largest trading partner.

Ties between the two countries have been strained since Australia accused China of meddling in its domestic affairs late last year. — Reuters