Increasing friction between the two superpowers of the 21st century, the United States and its nascent rival China, is coincidentally occurring in Australia’s backyard, so it was no surprise that deep divisions between the two countries came to the fore at the recent APEC meeting in Port Moresby.
Neither country could agree on the final communiqué on trade, with China aggressively rejecting a proposal to overhaul the World Trade Organisation and hitting out at what it labelled unfair trade tactics from the United States.
But the stoush over trade did not arise in a vacuum, nor was it just about trade, but rather against the backdrop of deepening regional competition between China and the U.S. in the Asia-Pacific region.
China has been aggressively expanding its sphere of influence in the South China Sea and beyond, but the U.S., Japan and Australia appear to be joining together to check further aggressive expansion.
The ABC reported that Papua New Guinea’s Prime Minister, Peter O’Neill, who was hosting APEC, declared that there were disagreements between the two “giants” at the meeting, adding that the “entire world is worried” by tensions between the nations.
China has been building up its influence in the region: Chinese businesses are now deeply invested in Pacific-island countries, and the Chinese Government is lending these countries large amounts of money for development.
As recently as last week, the tiny nation of Tonga announced that it had signed up to China’s Belt and Road initiative, with a reprieve on debt payments from Beijing. Tonga’s financial reliance on China dates back just over a decade after the deadly 2006 riots in the capital of Tonga, Nuku‘alofa, destroyed much of the small Pacific nation’s central business and government districts.
But the U.S. and its allies have also been keen to demonstrate that they are determined to reassert their presence in the South Pacific.
On Sunday, November 18, Australia, the U.S., New Zealand and Japan announced that they would pour millions of dollars every year into an ambitious effort to bring electricity to 70 per cent of the people in Papua New Guinea (currently it is only 13 per cent).
The U.S. also announced that it would partner with Australia and Papua New Guinea to upgrade the Lombrum Naval Base on Manus Island, which could hand Washington another crucial strategic outpost in the Pacific.
The boost has been described as the biggest naval commitment by the U.S. to Australia’s immediate region since World War II.
For new Prime Minister Scott Morrison, who is focused on a frenetic agenda of domestic matters rather than an international agenda, the U.S. commitment to the region was a boost.
And his promise to bring reliable electricity and the internet to PNG was well received.
The Australian’s editor-at-large, Paul Kelly, described the U.S. move as “a warning to China that its days of easy gains against a distracted Western alliance should be over”.
“The network of strategic, economic and infrastructure deals emerging from the Asian summit season reveals a Western alliance system – the U.S., Australia and Japan – in an assertive pushback against China’s regional influence,” Kelly wrote.
But Kelly warned players not to get too far ahead of themselves.
“Forget the predictable nonsense about containing China. China cannot be contained,” he wrote.
“Its aspiration is to control the regional order. The kickback on display is founded in the realpolitik of seeking a new balance of power in the region that denies China’s hegemony, a core Australian national interest.”
Australia is also heavily invested in the region already and has committed significant capital to the Asian Infrastructure Investment Bank (Australia is the sixth largest investor shareholder), and the Asian Development Bank (Australia is the third largest investor shareholder).
Predicted development in the Asia-Pacific region over the coming decades is expected to be massive.
The Department of Foreign Affairs has forecast “a large infrastructure financing gap in the Asian region – over the next decade, it is estimated that $US26 trillion of financing will be required to meet the needs of Asia by 2030”.
The Asian Infrastructure Investment Bank, which has an authorised capital of $US100 billion, is focused on infrastructure investment in Asia across a range of sectors, including transport, energy, water and communications.
However, the hope is that the expected rapid development in the region will be done in a spirit of cooperation and genuine interest in alleviating poverty rather than a mere land grab with China and its rivals buying influence and strategic footholds in small countries with no power to resist their might or money.