U.S., Australia to Develop Pacific Naval Base in Check on China

(Bloomberg) -- The U.S. will join Australia in redeveloping a naval base in Papua New Guinea as the two allies try to counter China’s growing strategic influence in the Indo-Pacific region.

Vice President Mike Pence announced the partnership on Saturday at an Asia-Pacific Economic Cooperation summit, where escalating trade tensions between the U.S. and China loomed large.

“We will work with these two nations to protect sovereignty and maritime rights in the Pacific Islands,” Pence said in his keynote address to regional leaders and business executives. Moments earlier, Chinese President Xi Jinping told the same audience that confrontation “whether in the form of a cold war, a hot war or a trade war, will produce no winners.”

U.S., Australia to Develop Pacific Naval Base in Check on China

The U.S. and Australia’s cooperation in developing the Lombrum Naval Base on Manus Island ups the ante in their effort to counter Beijing’s growing sway in the Pacific islands, a region comprising more than a dozen small nations strung over thousands of miles. While the Pacific has traditionally been regarded as Australia’s diplomatic backyard, China has increasingly issued loans and initiated infrastructure projects in several nations.

Amid speculation that China was wooing Papua New Guinea and planning to build its own military base, Prime Minister Scott Morrison on Nov. 1 said Australia was boosting its commitment to the region and would partner with PNG in redeveloping Lombrum.

The addition of the U.S. shows the Trump administration’s comments “about a new, competitive policy toward China in the Indo-Pacific isn’t just rhetoric -- it’s the real thing,” Philipp Ivanov, head of the Asia Society’s Australian branch, said in an interview in Papua New Guinea. “This could be positive for the region, but the U.S. has to ensure its commitment goes beyond the military component and into helping develop trade and infrastructure.”

The U.S. would also launch a $400 million Indo-Pacific Transparency Initiative to “help empower the region’s citizens, combat corruption, and strengthen sovereignty,” Pence said on Saturday. The U.S. is working with Japan to invest $10 billion in the region’s energy infrastructure, as well as partnering with Japan and Australia “to support a vast array of private development projects across the Indo-Pacific,” he said.

“With our renewed commitment to development financing, we’ve made infrastructure in the Indo-Pacific a top priority -– from roads to railways, ports to pipelines, airports to data-lines,” Pence said. “And the United States has a principled approach that stands in stark contrast to other nations.”

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