Australia says partnership with US and Japan in Asia isn’t meant to challenge China

The United States is competing with China’s ‘Belt and Road Initiative’ with a US$113 million Asian investment programme

PUBLISHED : Tuesday, 31 July, 2018, 11:10am
UPDATED : Tuesday, 31 July, 2018, 9:58pm

Australia and Japan have joined the United States in a push to invest in infrastructure projects in the Indo-Pacific region, at a time when China is spending billions of dollars on its Belt and Road Initiative across Asia.

The move is part of a broader effort by the United States and its allies to reassert their influence in the Pacific amid fears that the region is increasingly susceptible to diplomatic pressure from Beijing.

“The United States, Japan and Australia have formed a trilateral partnership to mobilise investment in projects that drive economic growth, create opportunities, and foster a free, open, inclusive and prosperous Indo-Pacific,” Australia’s Department of Foreign Affairs and Trade, the US Overseas Private Investment Corp and the Japanese Bank for International Cooperation said in a statement.

The investments will include energy, transport, tourism and technology infrastructure, with the governments aiming to attract private capital to projects.

US Secretary of State Mike Pompeo on Monday announced US$113 million in new technology, energy and infrastructure initiatives in emerging Asia in a speech defining the economic aspect of President Donald Trump’s “Indo-Pacific” strategy.

Pompeo said the United States “will never seek domination in the Indo-Pacific,” and that “we will oppose any country that does”.

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Pompeo is likely to make announcements about the pact’s funding arrangements during his visit to Asia, which will include Malaysia, Singapore and Indonesia, according to Stephen Kirchner, director of trade and investment programme at the US Studies Centre at the University of Sydney.

“This is designed to provide mechanism that will allow more private-sector funding for the infrastructure projects that countries in this region need,” Kirchner said.

That will mean it will operate in different ways to established funds such as the World Bank and Asian Development Bank, he said.

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Australia’s Trade Minister Steve Ciobo denied the three-way initiative was a challenge to China, saying it only added to various regional programmes already underway.

“It’s wrong to view these things as either/or. The fact is we can participate in and be part of all of the initiatives in the region,” Ciobo told Sky News television.

“All of this, this broad sweep of initiatives in the region, is all about addressing the huge unmet demand for the provision of infrastructure throughout the Indo-Pacific region.”

Ciobo said he did not expect backlash from China.

“The fact is that we demonstrate consistently that Australia is very focused on making sure that we can help the least developed economies in our region to get on to a more economically sustainable footing,” he said.

Without making specific reference to China, Pompeo said on Monday the United States was seeking “partners, not domination” in the region.

Australia has recently stepped up its engagement in the Pacific, allocating it the largest slice of its aid budget, while Japan has also been stepping up its diplomacy in the region, recently opening an embassy in Vanuatu’s capital, Port Vila.

China’s role in the region is set to be high on the agenda at the 18-nation Pacific Islands Forum annual meeting in Nauru in September.

Earlier this month China announced it was planning a first-ever summit between President Xi Jinping and Pacific Island leaders ahead of this year’s Asia-Pacific Economic Cooperation (Apec) forum in Papua New Guinea.

Reuters, Agence France-Presse, Associated Press and Bloomberg