Few Australian politicians want to admit that the “step-up” is targeted against another country. But it is occurring as Australians are becoming increasingly concerned with the significant Chinese increase of its diplomatic, economic and potentially military presence in the South Pacific, an area that has long been considered by Canberra to be its “backyard.”
Is Australia over-reacting? If not, why now? And can an economy less than one-eighth the size of China’s really compete with the latter’s ambitions in the South Pacific?
In Australian strategic circles, the notion of a supposed naval base around 2,500 kilometers (1,500 miles) from its shoreline did more than raise eyebrows. It played into the country’s sense of vulnerability.
Moreover, it has long been unofficial policy between allies that the United States and Japan secure Northeast Asia, the US with Australian support secures Southeast Asia, and Australia takes the primary responsibility for securing the South Pacific. Perhaps a naval base hosting PLA vessels in Vanuatu was never in the cards.
But the PLA is seeking to enhance its reach and any permanent Chinese military presence in the South Pacific would allow the its Navy to “break out” into the Western Pacific Ocean. That scenario — or any other base offered to it by a poor and desperate Pacific Island — would fundamentally undermine Australian strategic policy which has been in place since the end of World War II.
Beijing achieves this through showering small economies — which would otherwise find it difficult to attract foreign investment — with cheap loans. As has occurred in Sri Lanka, Cambodia, Laos and Pakistan, the tendency of these small and developing economies to accept far more debt that they can repay allows Beijing to dictate the political and/or strategic terms of any debt-forgiveness or restructuring assistance.
Persistent suspicion that China is seeking to use Hanabata and Gwadar Ports in debt-ridden Sri Lanka and Pakistan respectively for military purposes in the future only raises the discomfort levels for Australia when it comes to China in the South Pacific.
These, and other, efforts have been reactive to Chinese overtures.
The point is not to outbid China in terms of short-term generosity or allow Pacific Island nations to play Australia off against China to maximize both countries’ largesse. Morrison intends to ensure that these small economies will choose an Australian backed funding source which abides by World Bank and other international commercial standards but where access is fast-tracked and not held up by unnecessary regulations (typical of World Bank and Asian Development Bank Loans), and which impose repayment terms that are sustainable and will not endanger the solvency of these economies.
Australia knows it cannot keep China out of the South Pacific. But it can warn these developing economies about the price of severe indebtedness to China and offer them a ready alternative when it comes to the funding of critical infrastructure which would have domestic and/or regional security implications.
Most of all, recent Australian policy is belated recognition it needs to compete in a region which has remain benign and free from potentially hostile external influence for over seven decades.