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Papua New Guinea offer a stalking horse for China

By Michael Shoebridge

A $39bn proposal from an ­obscure Hong Kong-based company to build a city in PNG’s remote Western Province near Daru island on its southern coast is as easy to dismiss as a Nigerian Princess-type scam on steroids. But that’s missing the point.

Australian policymakers and business leaders with PNG interests would be wrong to be at all complacent because of what the proposal shows about Chinese intent in our near neighbourhood, and for the way such proposals might land in the complex world of PNG politics.

The combination is a dangerous mix with real and adverse implications for the region’s security, and PNG’s development and sovereignty.

The city proposal joins a more credible but still dodgy Chinese bid to build a $200m fish processing facility on Daru. Together, they show that Chinese money is searching for opportunities to ­expand the Chinese presence in PNG in ways that would enrich a small number of PNG elites and Chinese business people, while helping Xi Jinping’s China ­expand its presence and its ability to support military forces in Australia’s near neighbourhood.

A multi-billion-dollar metropolis in remote Western Province built and operated by Chinese entities for years and a fish processing facility scaled for more fish than swim in the waters around Daru make no business sense. They make sense as vehicles for channelling money into PNG’s political patronage networks to gain influence. They also help Chinese companies show Beijing they’re implementing Xi’s Belt and Road Initiative and command for them to “Go Out” ­globally.

Promises of millions — even billions — of dollars for a remote province are attractive not just for the Moresby government but for provincial leaders who need to deliver funds to local supporters.

Big money proposals like this can work the seams between PNG’s central and provincial governments, just as Beijing is doing with Victoria and Canberra on the BRI.

The lesson for Australia is to engage at all levels of PNG politics and deliver on the expectations we have created with the Pacific Step-up.

It’s not all about outcompeting Chinese money — it can be very practical and valuable assistance like Australia gave to Fiji after Cyclone Yasi. We have to avoid complacency and show we are a trusted partner who delivers on promises.

Michael Shoebridge is director, defence, strategy and national security at the Australian Strategic Policy Institute

Originally published by: on 04 Feb 2021