Australia the canary in China’s coalmine: Bannon


Former Trump chief strategist Steve Bannon says Australia ­delivered a historically important wake-up call to the US when it blew the whistle on the extent of China’s activities in the Pacific and beyond.

Bannon says it wasn’t until 2017 and early last year, when Washington learned the full extent of China’s meddling in Australian ­affairs and its creeping hegemony in the southwest Pacific, that the Trump administration set its policy sights more firmly on Beijing.

“Australia was the canary in the mine; it played an important role in the awakening of America to what China was doing,” Bannon tells The Weekend Australian. “That was a wake-up call and a lot of the guys in Washington, in the National Security Council and on Capitol Hill, saw how China was trying to influence our key ally (and others) in the Pacific.

“The Chinese are at economic war with the West. This radical cadre of the Chinese Communist Party and (President) Xi Jinping is absolutely determined to become a radical hegemon — you see it in the ‘One Belt, One Road’, ‘Made in China 2025’ and Huawei.”

Bannon was one of the earliest voices in the White House to point out Australia’s warnings about China’s economic and strategic encroachment in the island ­nations of the southwest Pacific.

Now for the first time since the end of the Cold War these countries — from Solomon Islands to Papua New Guinea, from Vanuatu to Fiji — find themselves in a much larger global play as the US, in concert with Australia and New Zealand, seek to push back against China’s efforts to redraw the power balance in the region.

This is why Scott Morrison will fly to the Solomons tomorrow for his first foreign visit since his election triumph. The fact the Prime Minister has chosen for his first post-election visit a ­Pacific Islands nation over Indo­nesia or other larger neighbours says much about this new strategic struggle over a ­region that has long been firmly in Australia’s sphere of influence. The visit will be watched carefully in Washington and Beijing, two capitals that are stepping up their own long-term campaigns to win the hearts and minds of the Pacific.

In high-level briefings in Washington this week, senior Trump administration officials told The Weekend Australian that the US was investing more diplomatic, military and economic resources into the Pacific Islands than at any time since the Cold War to combat China. Washington wants Australia and New Zealand to be its partners in this effort and believes Morrison’s visit underscores Canberra’s willingness to play a more central role. “Australia, New Zealand, France and the United States understand how central these ­islands are for security,” a senior administration official told The Weekend Australian.

“In terms of our Five Eyes relationship with Australia, it is hard to find a stronger alliance and partnership.”

China denies it is seeking anything more than good economic relations with these small island nations but the nature of its ­engagement suggests otherwise.

“China’s diplomatic and economic push into the Pacific is quickly changing the strategic landscape … the depth and breadth of its new engagement is striking,” states a report released last month by Washington’s ­Centre for Strategic and International Studies. “A Chinese military footprint in the Pacific Islands, ­sitting astride sea lanes running from Australia to Hawaii, could enable China to project power ­beyond the second island chain and severely complicate the ­ability of the US Navy to control Pacific waters of vital strategic interest.

“The possibility of a Chinese naval base in close proximity to Australian strategic waters has ­reshaped the strategic debate in Australia about Chinese presence in the Pacific Island region.”

This rising Chinese presence takes numerous forms, from trade and investment to development assistance and tourism — each calculated and weaponised to leverage Beijing’s long-term influence. More than 80 per cent of China’s loans to the region come in the form of concessional loans that look superficially attractive to poor island nations but that eventually must be paid back. For example, China has ­invested $US136 million ($197m) in a road project in Fiji, $US85m in roads in PNG and $US81m in a wharf development in Vanuatu.

According to the International Monetary Fund, Tonga, Vanuatu and Samoa each have serious debt repayment burdens to China.

Papua New Guinea's Prime Minister Peter O'Neill (R) shakes hands with China's President Xi Jinping during a meeting in Port Moresby on November 16, 2018.
Papua New Guinea’s Prime Minister Peter O’Neill (R) shakes hands with China’s President Xi Jinping during a meeting in Port Moresby on November 16, 2018.

“China’s debt-trap diplomacy runs counter to the region’s common vision of a free and open Indo-Pacific and its emphasis on preserving each country’s sovereignty,” a senior Trump administration official told The Weekend Australian.

Even Chinese tourism is being used to influence governments in the region. Between 2010 and 2015, China sharply ramped up tourism to Palau, giving a huge boost to the country’s economy that relies on tourism for 40 per cent of its gross domestic product.

“Then in late 2017, the Chinese government banned Palau as a tourist destination for state-run tour packages, causing Chinese (tourist numbers) to plummet and leading to charges that China was ‘weaponising tourism’ as a way to pressure Palau to switch its diplomatic recognition from Taiwan to the PRC,” the CSIS report says.

China has long sought to lobby Pacific Islands nations to switch diplomatic recognition from Taiwan to China but now Beijing is asking for much more in terms of “payback” for its investments.

PNG and Vanuatu have “chosen” to express support for China’s position on the South China Sea where Beijing has been widely condemned by Australia and the world community for building military installations on territorially disputed islands. Chinese ambassador to Vanuatu Liu Quan has been quoted as saying that China expects recipients of its foreign assistance to support China’s ­posi­tion in the UN ­because there is “no free lunch”. China also has ramped up its fishing in the region, sending its long-distance fishing fleets deep into the Pacific, with some of these boats acting as a cover for signals intelligence monitoring.

Morrison is visiting the Solomons as the country is under pressure to switch its diplomatic recognition from Taiwan to China and as Australia’s intelligence agencies are carefully monitoring Chinese activities there. Morrison is the first Australian prime minister to visit the island nation since Kevin Rudd in 2008.

Australia was forced in 2016 to take urgent action when the Solomons announced a deal with Chinese telco giant Huawei to build an underwater fibre-optic cable from Honiara to Australia. In response Australia, which has banned Huawei from its future 5G network ­because of its potential to be used by Beijing for intelligence pur­poses, pledged to fully construct a 4000km cable at a cost of more than $US100m linking Australia to the Solomons as well as PNG.

Perhaps the strongest evidence of China’s larger designs on the Pacific region is that it regularly ­invests in projects that island ­nations want but that make no sense from an economic perspective. Washington has watched in frustration as Beijing has poured many millions of dollars into ­developing Samoa’s sporting ­facilities, including its national stadium, so it can host next month’s Pacific Games.

“It will be a symbol of friendship between China and Samoa and contribute to the sports developments for all Samoan citizens.” Chinese embassy charge de affaires Li Hao Xing claims.

“What concerns us about China’s approach is that many of these projects do not make economic sense,” a senior Trump ­administration official told The Weekend Australian this week. “They are attempts to meddle in the internal political ­dynamics of the countries involved to achieve China’s larger strategic objectives in the region.”

China’s creeping foothold in the Pacific initially caught the US off-guard. After the Cold War with the Soviet Union ended, the US no longer had to keep an adversary from the region, so it wound down its diplomatic, economic and cultural ties. Washington began to re-­engage but in a haphazard way during Barack Obama’s “pivot” to Asia, with Hillary Clinton becoming the first US secretary of state to attend a Pacific Islands Forum dialogue in 2012.

But it is the Trump administration that has really invested time and effort to reach out to the ­region in conjunction with Australia and New Zealand.

Perhaps the most tangible sign of this fresh commitment is the White House’s decision to create a new role of ­director for Oceania and Indo-­Pacific security in the National ­Security Council, a role filled by Alexander Gray. The ­admin­istration has stepped up its senior visits to the region, with NSC director for Asian affairs Matt Pottinger travelling with Gray to Vanuatu and Solomon Islands, as well as to Australia, earl­ier this year. The top Asia official with the Pentagon, Randy Schriver, also has visited the ­region this year, as has Acting Assistant Secretary of State for East Asian and Pacific Affairs Patrick Murphy.

The Trump administration has launched its Free and Open Indo-Pacific strategy and has stepped up its diplomatic engagement in the region. The State Department is engaged in a review with a view to permanently boosting US diplomat posts across the Pacific. Washington is sending defence advisers to Fiji to work on maritime security issues and has placed ­defence attaches in PNG and the Federated States of ­Micronesia.

Donald Trump last month ­became the first US president to welcome all three leaders of the free associated states of Palau, Marshall Islands and the Federated States of Micronesia to the White House.

Australia also is rapidly boosting resources in the region under its own Pacific step-up policy. Canberra has established new diplomatic posts and proposed new bilateral security meetings as well as a $2 billion infrastructure ­financing facility.

The most concrete security-­related step by Australia is the ­redevelopment in conjunction with the US Navy of the Lombrum naval base on PNG’s Manus Island. Australia also is partnering with the US and others in a $US1.7bn project to build an electric grid in PNG, a project aimed at thwarting Chinese ­attempts to gain a stronger foothold there.

Morrison has promised a fresh focus on the Pacific and has promoted Alex Hawke to a frontbench ministry focused on the region. “That will ensure we’re able to integrate everything from our role in our international development program and defence initiatives throughout the Pacific to ensure we’re working closely with our Pacific family,” Morrison says. “You all know our passion for the Pacific step-up program, a very important program in Australia’s national interest. This trip (to the Solomons) will show our Pacific step-up in action.”

But Australia and the US face enormous challenges winning the hearts and minds of ­Pacific Islands leaders. China’s state-run enterprises can afford to take on uneconomic projects in the Pacific and easily can outspend the US and Australia, which have limited taxpayer dollars to spare and must rely heavily on encouraging private investments.

Many Pacific Islands leaders do not view the economic competi­tion between China and the West in terms of geopolitical competi­tion but are inclined to choose the allies who offer them the best deal.

As the CSIS points out: “The region does not want closer engagement to be framed in terms of competi­tion with China, since China is viewed as a welcomed external partner for economic ­develop­ment.”

The report also points out that many Pacific Islands leaders are disappointed by what they see as a lack of urgency on climate change in the US and Australia, given the threat they believe the issue poses to their region. And some question whether this new Pacific engagement by the US, Australia and New Zealand is permanent or merely a short-term marriage of convenience.

“The Pacific Islands (have) made clear that enhanced US diplomatic engagement under Trump is noted and appreciated, but many raised questions about whether it will be broad-ranging and sustainable,” the CSIS says.

Morrison’s visit to the Solomons will not be appreciated in Beijing, which is already upset by Canberra’s criticism of what it calls its “normal co-operation” with ­Pacific nations. But for Australia it will help to send a clear message that the re-elected Morrison government will be turning its eyes more than ever towards our closest neighbours in the Pacific in the face of a rising China. Every word Morrison speaks in the Solomons will be distilled through this prism and will be pored over carefully in Washington and Beijing.

By Cameron Stewart
The Australian


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