Oz overtakes China’s plans

Sydney – When Papua New Guinea Prime Minister Peter O’Neill flagged the possibility of China bankrolling a port development off his country’s northern coast in June, the consternation in neighbouring Australia set off a lightening-fast response.

Despite a change in leadership in Australia’s government in August, a rival offer was swiftly formulated, government and diplomatic sources said, amid concern the strategically located Manus Island port could regularly host Chinese military vessels.

Canberra, a staunch Washington ally, said earlier this month it would fund the port development, part of what analysts see as a push to reassert its dominance in the South Pacific as Beijing seeks a more prominent role.

“The Manus Island port was a big concern for us,” said a senior US diplomatic source, on condition of anonymity. “It was feasible Chinese military vessels could have used the port so we are very happy that Australia will fund the redevelopment.”

Australia is preparing to make the verbal deal formal at this week’s Asia-Pacific Economic Cooperation forum in Papua New Guinea’s capital, Port Moresby.

China has spent $1.3 billion (R19 billion) on concessionary loans and gifts since 2011 to become the Pacific’s second-largest donor after Australia.