The story China went to furious lengths to stop from airing

China's Canberra embassy issued a fierce diktat over a story they didn’t want Aussies to know. Here’s what happened.
By Gavin Fernando and Charis Chang

FIVE days before 60 Minutes aired a program about China’s quest for global dominance, the team received a furious phone call.
“Take this down and take it to your leaders!” the voice on the other end was yelling.
On the line was Saxian Cao, the Head of Media Affairs at the Chinese Embassy in Canberra, and she was laying into the program’s Executive Producer Kirsty Thomson.
“You will listen! There must be no more misconduct in the future!” Cao shouted into the phone.
According to Nine News, Cao accused the network of filming the exteriors of the Chinese Embassy in Vanuatu illegally — a claim Ms Thomson refuted.
Cao also claimed a drone was used to fly over the embassy in a potential safety hazard, which was also disputed.
The report claimed the phone did not end amicably, with Cao shouting: “You will not use that footage!”
It highlighted the lengths to which the Chinese government will go to silence voices it doesn’t agree with — even within Australia, amid an ongoing national debate over foreign interference laws.
The offending 60 Minutes episode — which aired earlier this week — covered the ongoing issue of Chinese encroachment in the Pacific, including the country’s Belt and Road Initiative, a Chinese-built wharf in Vanuatu, and the wider issue of foreign interference in Australia.
So what was the Chinese Communist Party so keen to hide?

CHINA’S RISING INFLUENCE IN THE PACIFIC
Papua New Guinea will soon be the second country in the Pacific to sign on to China’s Belt and Road Initiative.
“When in China, we’ll be signing the ‘One Belt, One Road’ initiative,” PNG Prime Minister Peter O’Neill said earlier this week, according to local media.
“That is a great potential for Papua New Guinea, which means that this will help integrate our own economy to the global economy … The rest of the world is making business with China and we cannot simply sit back and allow these opportunities to go by.”
The PNG leader is currently in Beijing for a week-long visit.
The move will no doubt raise alarm bells in Canberra, with fears China is increasing its presence in the Pacific region.
In April, Fairfax Media reported Beijing was negotiating a military base less than 2000 kilometres from our border.
China and Vanuatu have both denied the report, which claimed Beijing was eyeing a military base in the island nation, with global ramifications.
“No one in the Vanuatu government has ever talked about a Chinese military base in Vanuatu of any sort,” Foreign Minister Ralph Regenvanu said. 

“We are a non-aligned country. We are not interested in militarisation.”
The move prompted fears in Australia over Beijing’s aims for greater military influence in the South Pacific region.

The Conflict Islands in Papua New Guinea.
But Beijing’s economic influence in Vanuatu remains undeniable, with China responsible for almost half of the island nation’s foreign debt.
In places like Sri Lanka and the African nation of Djibouti, China has been granted control over ports after the countries defaulted on massive loans taken out to build the ambitious projects.
There are now fears the same pattern will play out in Vanuatu where China has loaned the country $114 million to build a wharf at Luganville — the site of America’s second largest base in the Pacific during World War II.

CHINA’S DEBT-TRAP STRATEGY
China’s debt-trap game goes something like this: they offer the honey of cheap infrastructure loans, then attack with default when these poorer economies aren’t able to pay their interest down.
At the heart of this sits the Belt and Road Initiative, a trillion-dollar project that seeks to connect countries across continents on trade, with China at its centre.
The ambitious plan involves creating a 6000km sea route connecting China to South East Asia, Oceania and North Africa (the “Road”), as well as through building railway and road infrastructure to connect China with Central and West Asia, the Middle East and Europe (the “Belt”).

This map details China's Belt and Road Initiative.

In the interview with 60 Minutes, Dr Malcolm Davis, senior analyst in defence strategy and capability at the Australian Strategic Policy Institute, said China is mainly targeting poorer countries and employing a “debt-trap strategy”.
He said the trillion-dollar project basically forces other countries to align themselves with it.
“It gets countries — particularly poorer countries — hooked on debts they can’t pay back,” he said. “When they can’t pay it back, China basically grabs ports, facilities or territory. It’s a debt-trap strategy.
“It services their need in terms of accessing resources, sustaining contacts and national development, and maintaining that ‘China Dream’. It’s really vital for the Communist Party to maintain prosperity if they want to maintain power.”

WHY THE PACIFIC IS CRUCIAL
Why is the Pacific so important to China? 

From the rising superpower’s perspective, Papua New Guinea, Vanuatu, the Solomon Islands and Fiji are the most crucial, as they have the most minerals and natural resources.
But while the strategic aspects of China’s interest in the region have been highlighted recently, experts believe they have been over-hyped.
“I don’t think (the region) is enormously important to China,” Australian National University’s Development Policy Centre deputy director Matthew Dornan told news.com.au.
“The amounts of aid they provide are still not huge. Australia provides a lot more.”
According to the Lowy Institute, China spent $2.2 million on 218 projects in the Pacific between 2006 and 2016. 

This is a lot less than the $10 million Australia contributed.
“I don’t think the Pacific tops its list in terms of strategic importance, even if it does for Australia,” Dr Dornan said.

Australia will no doubt be keeping an eye on China’s strategic moves in the Pacific region.

While the Pacific may not be high on China’s agenda, Australia appears to have woken up to the importance of the region to its own interests.
Foreign Minister Julie Bishop recently returned from a bipartisan trip to some Pacific nations with Labor shadow minister Penny Wong. 

They visited Palau, the Federated States of Micronesia and the Marshall Islands.
Ms Bishop has denied that the trip was aimed at countering Chinese influence but in an interview with Fairfax Media, acknowledged that China’s construction of roads, ports, airports and other infrastructure in the region had triggered concern that small Pacific nations may be saddled with unsustainable debts.
“We want to be the natural partner of choice,” Ms Bishop told Fairfax earlier this week.
“We want to ensure that they retain their sovereignty, that they have sustainable economies and that they are not trapped into unsustainable debt outcomes.
“The trap can then be a debt-for-equity swap and they have lost their sovereignty.”

How China tried to shut down Australian media coverage of its debt-trap diplomacy in the Pacific

• A Chinese Embassy official yelled and made demands of an Australian producer to try and censor an episode of "60 Minutes" that would be critical of China.
• The Chinese Communist Party regularly interferes with foreign Chinese-language media, but targeting English-language media is rare.
• The "60 Minutes" report covered China's debt-trap diplomacy in the Pacific, including a loan to Vanuatu for a wharf which could be used by the Chinese military.
• Vanuatu's foreign minister said China expects support at the UN in return for financing.

By Tara Francis Chan

Five days before Australia's "60 Minutes" program aired a report on China's dept-trap diplomacy in the Pacific region, the show received an unusually aggressive phone call.
"Take this down and take it to your leaders!" the voice on the other end of the line shouted.
It was the voice of Saixian Cao, the head of media affairs at China's embassy in Canberra.
According to a report from "60 Minutes" journalist Charles Wooley, she was yelling at the show's executive producer, Kirsty Thomson, after failing to gain any traction with higher-ups at the network.
"You will listen," Cao reportedly shouted into the phone.
"There must be no more misconduct in the future."
Thomson and colleagues had been working on a story about China's growing influence over Pacific nations, by using exorbitant loans for infrastructure projects that leave countries indebted to Beijing, both politically and financially.
The story largely focused on China's projects in the island nation of Vanuatu — where the show's team had also recorded footage of the Chinese embassy — and the official was trying everything to kill the story.
"You will not use that footage," Cao demanded.
The incident highlights how China is used to dealing with — and controlling — the Australian media.
Chen Yonglin, a former diplomat at the Chinese Consulate in Sydney who defected in 2005, told Business Insider that this happens frequently with local Chinese language media in Australia and that, ultimately, the incident in Australia would have originated in Beijing.
"The instruction to pressure Channel 9 is from the Ministry of Foreign Affairs. The Ministry obviously believed it is necessary. The representation is to warn Channel 9 and other people not to act like that again," Chen said.
Chen also described how monitoring, and attempting to censor media coverage, is a regular occurrence.
"If it's a local Chinese-language media, the Chinese Embassy/Consulate official should call the Editor-in-Chief directly with serious warning and certain sanctions against this media may follow. For less serious cases, China may request to publish a statement from its Embassy."
Business Insider previously reported how diplomats at a Chinese consulate in Australia invited an advertiser in for an hours-long "tea chat" to convince them to stop funding independent Chinese-language journalism.
Another advertiser had Chinese intelligence and security agents physically camp out in his Beijing office to strip funds from critical media.
And last year, two South Korean journalists who followed President Moon Jae-in's trip to Beijing were physically beaten and severely injured by more than a dozen security guards.
Despite the lengths China often goes to influence and outright interfere with foreign media, Chen believes Cao could face repurcussions for crossing a line.
"All Chinese language media are very obedient. Shouting at local Chinese media is not a surprise, but [shouting] at one of the mainstream English media is rare. Saixian Cao could be punished for her behaviour such as being given an internal warning," Chen said.

China gave Vanuatu a loan 360% more expensive than other options

Part of the "60 Minutes" episode highlighted a Chinese-built wharf in Vanuatu that has gained international attention.
Earlier this year reports emerged that China discussed setting up a military presence in Vanuatu, a claim both countries denied but which Australian defense officials confirmed.
And the country's newly built Luganville wharf, which was funded by China and seems more suited to navy vessels than cruise ships, would be crucial to this.
The fear is that Vanuatu, like many countries before it, accepted a loan with exorbitant interest rates and may need to hand over the wharf to China if it defaults, a practice called debt-trap diplomacy.
The country can't even afford the cleaning or electricity bill for a $19 million, Chinese-built convention center.
Yet Vanuatu took an $85 million loan from the Export-Import Bank of China for the Luganville wharf, which is topped with a 2% interest rate, that needs to be repaid within 20 years. 
But a similar wharf project in Port Vila, which was funded with a Japanese loan only required a 0.55% interest rate and gave the country twice as long to repay it.
Business Insider contacted Foreign Minister Ralph Regenvanu with questions about these loans last week but has not yet received a response.
When Sri Lanka defaulted on its loan for a Chinese-built port, it gave state-owned China Merchants Group a 99-year lease which experts believe was a strategic acquisition in the region.
China expects supporting votes at the UN in return.
Chinese Foreign Minister Wang Yi speaks at a Security Council meeting during the 72nd United Nations (U.N.) General Assembly at U.N. headquarters on September 20, 2017 in New York City.

Not only are there concerns that China is trying buy access to facilities and sea routes throughout the Pacific, Vanuatu's foreign minister confirmed Beijing's influx of cash has very, and immediate, global consequences.
Asked by "60 Minutes" whether he thinks China is trying to buy votes at the UN, Regenvanu answered in the affirmative.
"What so you think if they can pump money in here, they'll get support at the UN?" the reporter asked.
"Yes," Regenvanu answered.
"I'm sorry, that's bribery."
"Uh, maybe, that's diplomacy," Regenvanu said.
Australia has been trying to counter China's attempts at foreign interference both locally and in the Pacific, with new and expanded laws currently before parliament.
Last month, an Australian MP and chair of parliament's intelligence and security committee publicly identified Chau Chak Wing, a Chinese-born, Australian billionaire and political donor as having funded a $200,000 bribe to a former UN General Assembly president in order to advance Chinese interests.





Beijing henchman Chau Chak Wing

Chinese Peril

With cash to burn, China now has the power to disrupt the rest of the world — and its first targets are a big problem for us.
By Charis Chang


CHINA finally seems to have completed its coming of age, and now has the power and money to disrupt diplomatic relations around the world.
After decades of taking its neighbors for granted, Australia is starting to wake up to China’s potential to dominate the Pacific region.
The superpower has been splashing its cash and growing its influence in the region at the same time as Australia’s assistance has stalled.
Now some experts warn China could eventually establish a military presence right on Australia’s doorstep.
“It’s got global ambitions and it’s challenging the rules based international order,” security analyst Malcolm Davis told 60 Minutes on Sunday.
“What the Chinese tend to do is that they put heavy investment into countries that simply don’t have the means to pay back the debt.
“So they’re getting countries addicted to debt and then when they call in the debt and the countries can’t pay, the Chinese will take a port or a territory or take an island.”
In places like Sri Lanka and the African nation of Djibouti, China has been granted control over ports after the countries defaulted on massive loans taken out to build the ambitious projects. 

There are now fears the same pattern will play out in Vanuatu where China has loaned the country $114 million to build a wharf at Luganville — the site of America’s second largest base in the Pacific during World War II.
While the port was built to attract cruise ships to the region, it is big enough to accommodate foreign naval ships including guided missile destroyers, cruisers and even aircraft carriers.

The new wharf at Luganville, Vanuatu. 

“The Chinese wouldn’t be building all this just to cash in on a very limited tourist market,” Dr Davis said. 

“They’re thinking commercial influence, political influence and ultimately a military presence.
“If the Chinese were to bring naval forces into this region, it fundamentally changes our strategic outlook in a way not seen since the 1940s.”
Director of the East Asia Program at the Lowy Institute, Merriden Varrall told news.com.au that Australia seems to have had taken the region for granted but this was likely to change now that China has stepped up its presence.
“I think it has been rather overlooked in the past and rather taken for granted by Australia,” she said.
But while China’s aid in the region was significant, it was no where near what Australia contributed.

Vanuatu Foreign Minister Ralph Regenvanu admits the country made mistakes on some projects it has done with China but says it would never give China a military base in Vanuatu.

“We are a non-aligned country... so this big power play that’s happening in which China is involved, in which Australia is involved, Vanuatu wants to be no part of it,” Mr Regenvanu said.

WHY IS THE PACIFIC IMPORTANT?
Australian National University’s Development Policy Centre deputy director Matthew Dornan said there were many reasons why the Pacific was important strategically.
For Australia, the most important islands were the ones that were the closest: Papua New Guinea, Vanuatu and the Solomon Islands.
From China’s perspective, Dr Dornan said those same islands were also important, as well as Fiji, as they had the most minerals and natural resources.

“I don’t think the Pacific tops its list in terms of strategic importance, even if it does for Australia,” Dr Dornan said.

While the Pacific may not be high on China’s agenda, Australia appears to have woken up to the importance of the region to its own interests.
Foreign Minister Julie Bishop recently returned from a bipartisan trip to some Pacific nations with Labor shadow minister Penny Wong. 

They visited Palau, the Federated States of Micronesia and the Marshall Islands.
Ms Bishop has denied that the trip was aimed at countering Chinese influence but in an interview with Fairfax media, acknowledged that China’s construction of roads, ports, airports and other infrastructure in the region had triggered concern that small Pacific nations may be saddled with unsustainable debts.
“We want to be the natural partner of choice,” Ms Bishop told Fairfax Media on Tuesday.
“We want to ensure that they retain their sovereignty, that they have sustainable economies and that they are not trapped into unsustainable debt outcomes.
“The trap can then be a debt-for-equity swap and they have lost their sovereignty.”
Australia is aiming to provide the counterbalance to the influence of other nations in the region, including Russia.
Australia has also stepped in to build a high-speed underwater communications cable project to connect the Solomon Islands and Papua New Guinea to Australia.
The Solomon Islands had originally made a deal with rogue Chinese company Huawei in late 2016 to construct the fibre-optic cable, to improve the country’s often unreliable internet and phone services.
But Solomon Islands Prime Minister Rick Houenipwela said earlier this month there had been a change of heart following “some concerns raised with us by Australia”, without elaborating.

Prime Minister Malcolm Turnbull with the Prime Minister of the Solomon Islands, Rick Houenipwela. 

Ms Bishop refused to detail what concerns Canberra had with telecom giant Huawei.
“I would not elaborate on security issues, that’s not appropriate,” she told reporters.
“What we have offered the Solomon Islands, and they have accepted, is an alternative to the offer, and ours is cheaper. It’s likely to be a faster result for them, and technically superior.”
Huawei has long disputed claims of any links to the Chinese government but it was blocked from bidding for contracts on Australia’s national broadband project in 2012, due to concerns about cybersecurity.
In another sign of the importance Australia is now putting on its relationship with its Pacific neighbours, it has bumped up its foreign aid spending in the region to its highest ever, from $1.1 billion to $1.3 billion.
This is in contrast to the heavy cuts it has made to the overall aid budget since 2015/16, which have hit countries in Africa and the Middle East in particular.

‘WE COULD HAVE PAID MORE ATTENTION’
While Dr Dornan does not think Australia has completely dropped the ball in the Pacific, especially as it has largely maintained aid to the region, it could be doing more and not just when it comes to foreign aid.
“Certainly I think Australia could have paid more attention to the region and been responsive to what the region would like from Australia,” he said.
This includes considering the region’s requests for its citizens to be able to work more freely in Australia, as well as addressing its concerns about climate change — instead of making them the butt of jokes.
Dr Dornan said New Zealand had a special migrant category for Pacific Islanders in recognition of its history as a colonial power in the region.
“Australia also has that history but there are very few Papua New Guineans in Australia despite being our neighbor,” he said.
He also believed links between Australian and Pacific Islander peoples should be improved.
“Generally the public’s understanding of the Pacific in Australia is limited,” he said. 

“We are not taught about the Pacific like we are taught about the history of Europe.”
While Pacific Islanders had a good understanding of Australia because it was such a large country, the reverse was not true.
“It’s very hard to have strong relationships with countries with no common understanding,” he said.
But he said he thought the biggest challenge that would impact the ongoing relationship was climate change.
“It’s hugely important for the Pacific, it’s an existential problem for some countries which may disappear in the future,” he said.
“The federal government has really been dragging the chain on climate change action, it won’t be resolved easily but I think Australia could do more, and that would help to improve relations with the Pacific.”

The Conflict Islands in Papua New Guinea.

China's Pacific Islands Push Has the U.S. Worried

The latest frontier in Beijing’s bid for global influence is a collection of tiny island nations.
By Jason Scott

In the gritty, steamy streets of Papua New Guinea’s capital Port Moresby, signs of China’s push into the Pacific island nation are inescapable.
A Chinese worker stencils a logo for China Railway Group outside the new national courthouse it’s building; China Harbor Engineering Group laborers tar roads under the searing midday sun.
“Little by little they are taking slices of our businesses,” said Martyn Namorong, who campaigns to protect local jobs and communities as China ramps up infrastructure spending in the resource-rich nation, bringing its own workforce.

“My people feel we can’t compete.”
The nation of 8 million people is the latest frontier in Beijing’s bid for global influence that’s included building artificial reefs in the South China Sea, a military base in Africa and an ambitious trade-and-infrastructure plan spanning three continents.

Advertisement for China Construction Bank outside the airport in Port Moresby.

China’s thrust into the Pacific islands region, a collection of more than a dozen tiny nations including Fiji, Niue and Timor Leste scattered across thousands of miles of ocean, has the U.S. and its close ally Australia worried. 

The region played a key role in World War II and remains strategically important as Western powers seek to maintain open sea lines and stability. 

For Beijing, it offers raw materials, from gas to timber, and a clutch of countries who could voice support for its territorial claims.
“We’ve seen a huge surge in China’s state-directed economic investment and mobilization of an enormous amount of capital in the Pacific which clearly has a strategic intent,” said Eric B. Brown, a senior fellow in Asian affairs at Washington-based think tank the Hudson Institute. 

“The sovereignty of these nations could be compromised by these predatory economic methods. And that could create a military threat to countries such as Australia and effect the ability of the U.S. Navy and its allies to maintain freedom and order in the Pacific.”

Debt Trap
China’s lending practices related to the Belt and Road Initiative have raised concerns among the International Monetary Fund and the Trump administration that poorer countries wouldn’t be able to repay heavy debts. 

Sri Lanka is considered an example of what could go wrong for developing nations: China received a 99-year lease for a strategic port after the government in Colombo couldn’t repay loans.
Indeed China has overtaken Japan as Papua New Guinea’s largest bilateral creditor and by the end of the year PNG will owe it about $1.9 billion in concessional loans — almost a quarter of its total debt burden. 

Standard & Poor’s in April lowered the nation’s sovereign credit rating to B from B+, citing rising costs of servicing debt that’s climbed above 30 percent of gross domestic product and is expected to reach about 40 percent by 2021.

The IMF warns that other recipients of Chinese money in the region — tiny nations such as Samoa, Tonga and Vanuatu — have moderate to high risks of debt distress.
While the largess flowing into the Pacific from Beijing is a fraction of the $350 billion of Chinese aid distributed globally since 2000, it’s still big money for the nations, most with populations under 1 million. 

In April, the French Polynesian government approved construction of a $320 million Chinese fish farm.

Military Presence
Hugh White, a professor of strategic studies at the Australian National University in Canberra, says “there’s no doubt” China could seek to establish a military presence in the Pacific in the future, cashing in its influence with “one of these small, vulnerable states.”
“It intends to become the primary power in east Asia and the western Pacific,” White said.
Governments in the region have sought to strike a balance between accepting China’s cash and resisting moves that would raise concern among Western military powers. 

Vanuatu in April denied media reports that China had approached it to build a permanent military base in one of its harbors.

Peter O'Neill and Xi Jinping in July 2016.

The office of PNG’s Prime Minister Peter O’Neill, who’s due to meet Xi Jinping in China later this week, didn’t reply to repeated requests for comment. 

When O’Neill visited Beijing in 2016, he pledged support for China’s military build up in the South China Sea. 

In December, a month after China promised to construct $3.5 billion of roads, O’Neill said PNG will continue to be a “staunch partner.”
Beijing’s push into the Pacific islands risks further straining ties with key trading partner Australia — which views the region as its own diplomatic backyard and has been increasingly critical of China’s economic and military muscle-flexing.
During a visit to the region this month, Foreign Minister Julie Bishop said “we want to continue to be the partner of choice for nations in the Pacific.” 

Her government on June 13 signed an agreement to build a new undersea telecommunications cable to the Solomon Islands, squeezing out a bid by China’s Huawei Technologies Ltd.
Papua New Guinea has traditionally looked to Australia — from which it won independence in 1975 — for a helping hand. 

Outside of the capital, the nation’s woeful roads network has helped push prices of food staples beyond what many can afford.

It’s also struggling with an illiteracy rate of 35 percent, poor tax collection and endemic corruption.

Australia is still its largest donor, contributing more than three-quarters of total aid and loans compared to China’s 14 percent. 

Yet the majority is directed to improving corporate governance, while Beijing has focused on infrastructure and major works.

‘Red Carpet’
Nursing a cool drink at a sports club in Port Moresby, British-born business adviser Paul Barker said China was stepping into a vacuum left by the west.
“The government in Beijing has rolled out the red carpet and our leaders seem to be a bit intoxicated by the experience,” said Barker, who’s lived in his adopted nation for more than four decades.
Australia’s assistant trade minister Mark Coulton acknowledged the merits of China’s investment as he sat in one of Port Moresby’s few five-star hotels near the Beijing-gifted convention center where APEC leaders will meet in November.
“You can’t deny your neighbor if someone is looking to build something they really need,” he said. “Our role is to give the PNG government and people the ability” to “handle influxes of foreign aid like those that are now occurring.”
China’s foreign ministry, which didn’t respond to a request for comment, in April said Pacific island nations weren’t in the “sphere of influence of any country” and called on Australia not to interfere.

China Railway Group signage at the construction site of the new national courthouse.

China is in the region to stay, said Jonathan Pryke of the Lowy Institute, a Sydney-based think tank.
“China has entered the Pacific in a significant way,” said Pryke.

“It’s upended the status quo and caused anxiety, because no-one knows what its end-game is."

Rogue Nation

France, Australia call on China to observe rules
By Trevor Marshallsea 

French President Emmanuel Macron, right, presents the Legion d’Honneur award to Australian war veteran William Mackay in Sydney, Wednesday, May 2, 2018. Macron is on a three-day visit to Australia. 

SYDNEY — French President Emmanuel Macron and Australian Prime Minister Malcolm Turnbull on Wednesday issued a reminder to China to respect a rules-based order in the South Pacific amid concerns about Beijing’s growing influence in the region.
Macron’s comments came during a three-day visit to Australia, during which the two nations signed a range of agreements, including a pact to strengthen defense ties.
The two leaders were also expected to discuss China’s growing influence in the South Pacific. Australia has become concerned about increasing Chinese investment in infrastructure projects in the area, especially reports — denied by Beijing — that it wants establish a permanent military base in Vanuatu. 

This follows China’s contentious claiming of islands in recent years in the South China Sea.
Macron was scheduled to depart on Thursday for New Caledonia, a French-controlled island near Vanuatu, which will hold a referendum in November on breaking away from France’s protection and becoming a republic.
While Macron and Turnbull did not specifically confirm they discussed China during their Sydney meetings. 

But when asked about Beijing’s South Pacific push at a joint news conference, the two leaders were eager to stress the need for lawful development in the area.
“China’s rise is very good news for everybody. It’s good for China itself, its middle classes, and it’s good for global growth, and regional growth,” Macron said. 

“What’s important is to preserve a rules-based development in the region, especially in the Indo-Pacific region, and to preserve the necessary balances in the region.”
“And it’s important not to have any hegemony in the region,” he said.
Turnbull said the economic rise of China was made possible “by a ruled-based order in our region”.
“We welcome further Chinese investment in our region. We welcome the benefits of the growth of China. But of course we are committed to the maintenance of the rules-based international order, to good governance, strong standards, that will enable us all to continue this remarkable arc of prosperity that has been enabled by that rule of law,” Turnbull said.
Turnbull cited an oft-used quote from former Singaporean Prime Minister Lee Kwan Yew in pushing for mutual respect among nations in Asia, saying “big fish cannot eat little fish, and little fish cannot eat shrimps.” 

Macron added: “And especially New Caledonian shrimps.”
France is the only European nation with direct territorial links to Pacific region countries, which play a role in its defense building. 

It has more than 1.5 million citizens and 8,000 military personnel spread across several territories in the Pacific and Indian oceans.
Macron said he was keen for France to build a broader strategic relationship with Australia. 

Already, a French company Naval Group is building Australia’s new fleet of 12 submarines at a facility in Adelaide, under a deal worth $36.3 billion.
Also as part of Macron’s visit, France and Australia signed pacts to strengthen military ties, both through cooperation in maritime activities and the establishment of an annual Franco-Australian defense industry symposium.
Macron also expressed a desire for France to be “at the heart” of the Indo-Pacific region.
“I believe we have one shared goal, that is to turn our two countries to place them at the heart of a new axis, an Indo-Pacific axis,” Macron said.
Asked about growing tensions about Iran’s nuclear weapons capabilities, Macron said that regardless of Trump’s May 12 decision a new agreement should be negotiated with Teheran.
Macron, who told the United Nations last September that the current deal was not sufficient, said it should be broadened to address three new main areas — Iran’s nuclear activity after the current deal expires in 2025; improvements in the monitoring and controlling of Iran’s domestic nuclear activity, and to have better containment of Iranian activity in the Middle East, especially in Iraq, Syria, Lebanon and Yemen.
Macron, who visited Washington last week, said Trump responded “positively” to his recent suggestion for a new agreement while he had also “exchanged about that” in the past few days with Iranian President Hassan Rouhani and Russian leader Vladimir Putin.
Macron said whatever Trump’s coming decision, a broader deal was needed because “nobody wants a war in the region and nobody wants an escalation in terms of tension in the region.”
With trade talks also a key part of the visit, Macron said France would support formal talks on a free trade deal between Australia and the European Union after it found solutions to concerns it had on agriculture.
The countries also signed agreements to counter cyberwarfare and on committing to strategies addressing climate change, including working to make coral reefs in the Pacific more resilient.
Macron also used a ceremony commemorating Australia’s wartime cooperation with France to highlight a global worldview as a counter to nationalism.
A week after criticizing Trump’s “America first” policies on his trip to Washington, and hours after a May Day gathering of European anti-immigration populist leaders and violent right-wing protests in his home country, Macron said the Australia’s wartime sacrifice in Europe should serve as “a powerful message at a time when nationalism is looming, entrenched behind its borders and its hostility to the rest of the world.”
“No great nation has ever been built by turning its back on the world,” he said.

China Threat

Australia Shudders Amid Talk of a Chinese Military Base in Its Backyard
By JACQUELINE WILLIAMS

Prime Minister Charlot Salwai Tabimasmas of Vanuatu addressing the United Nations General Assembly in 2016. A report this week suggested that China was building a military base in Vanuatu, just miles from Australia. 

SYDNEY, Australia — The Australian government has warned China against building a military base in the South Pacific following a report that the Chinese had approached the tiny island nation of Vanuatu about establishing an outpost there.
The report on Monday that the Chinese and Vanuatu governments had held preliminary discussions about a permanent Chinese military presence in the former French colony, which is 1,500 miles off the coast of Australia, has raised alarm bells in the region.
But China hit back quickly on Tuesday, with a Chinese foreign ministry spokesman dismissing the report that it was seeking to put a base on Vanuatu as “fake news.” 

Vanuatu’s government also said that there was no such proposal. 

And Australia’s prime minister, Malcolm Turnbull, said Vanuatu had assured his government that no such request had been made.
“We would view with great concern the establishment of any foreign military bases in those Pacific Island countries and neighbors of ours,” Mr. Turnbull said on Tuesday.
Massive infrastructure projects and investment activity around the world form the backbone of China’s ambitious economic and geopolitical agenda, but to date China has built only one full-fledged overseas military base, in the Indian Ocean port of Djibouti on the Horn of Africa. 

It has also been building military outposts on man-made islands in the South China Sea despite U.S. concerns.
The prospect of a Chinese military base close to Australia in the South Pacific could provide a significant boost in Beijing’s ability to project its power, and could also undermine the strategic dominance of Western powers in an area they have long effectively controlled.
An official with the United States State Department confirmed the department was aware of the report and was seeking to determine its credibility. 

The United States has an enduring interest in the security and stability of the Pacific, the official added.
The report comes as many Australians have become increasingly alarmed about Chinese influence in the country, with Australian politics recently thrown into turmoil over allegations that China is trying to buy its politicians and sway its elections.
Experts say officials in Australia, the United States, and New Zealand are closely watching Beijing as it deepens its influence in the South Pacific through infrastructure projects and loans to smaller nations, and any effort to build military bases in the region would be particularly worrisome.
“If it were to happen, and it’s a huge if, it would be an aggressive move in the eyes of Australia, the U.S. and New Zealand,” said Graeme Smith, a Pacific Affairs expert at the Australian National University in Canberra.
Vanuatu, an impoverished nation, is considered to be within Australia’s sphere of influence, with Canberra providing it with aid and investment. 

Australian politicians said that a Chinese base on Vanuatu would be a potential game changer strategically for the region.
“It would have not only security but economic consequences for the region, and we should regard it as a wake-up call for Australia,” Senator Penny Wong told the Australian Broadcasting Corporation.
“It is not in the interest of the region — or in the interests of stability — for there to be increased competition, great power competition, in our region,” she said.
Jonathan Pryke, a Pacific islands expert with the Lowy Institute, noted that Vanuatu is home to a wharf built and financed by China that could conceivably be used for military purposes, particularly if Vanuatu has problems repaying the loan.
“They can provide a nice bit of economic leverage over that country,” Mr. Pryke added.
Fairfax Media reported that Beijing had recently committed to building a new residence for Vanuatu’s prime minister, Charlot Salwai, as well as other government buildings. 

Vanuatu has also reportedly been given hundreds of millions in development money by the Chinese.

Chinese military outpost in Vanuatu a ‘massive nightmare’ for Australia, experts warn

China’s latest move in our region confirms the biggest fear Australian strategic thinkers have held since 1901

By Gavin Fernando

DEFENCE experts have warned that China’s latest flagged move in the South Pacific presents a “massive nightmare” for Australia.
Fears have mounted following reports Beijing is seeking to establish a permanent military base in Vanuatu, less than 2000km from the Australian border.
Initial talks have already begun with Vanuatu, which could see Beijing establishing a major military presence and upsetting the strategic balance of the region, Fairfax Media reported today.
Experts warn this will essentially see a Chinese military outpost planted directly in Australia’s backyard.
Adam Lockyer, a senior lecturer in Security Studies at Macquarie University, stressed that this is a huge deal for us.
“This is a big nightmare for Australia,” he told news.com.au. 

“A Chinese base here has been the primary fear of Australian strategic thinkers since Federation.”
So what’s China playing at?
Dr Lockyer said Australia had always been relatively safe as long as a great power — like China — didn’t have a base within proximity.
Since the end of World War II, we’ve fought to ensure no other power could interfere with us from the South Pacific region.
He explained that there’s a strategic military purpose to building a nearby base, in that you don’t need to defeat an entire army; you only need to defeat a small faction of the army that can be projected in one wave.
“As soon as you have that, Australia is vulnerable to military attacks and skyrockets,” he warned. 

“Canberra will be panicking if these reports are true. This is really going to shake the cage.”

Julie Bishop has downplayed the fears, saying she is confident of our relationship with Vanuatu.

Foreign Minister Julie Bishop downplayed fears this morning, saying she was confident of Australia’s strong relationship with the island nation 1750km east of Northern Australia.
She also noted that China has only established one military base — in Djibouti in northern Africa.
“I’m not aware of a military offer being made by China to Vanuatu,” she told ABC radio today.
She also noted that Vanuatu’s high commissioner in Canberra, Kalfau Kaloris, said his country’s foreign ministry was “not aware” of China’s plan to build a permanent presence on the island.
“We have very good relationships with Vanuatu and I remain confident that Australia is Vanuatu’s strategic partner of choice.”

China is building military bases on the contested Spratly Islands.

Dr Lockyer also stressed this isn’t necessarily an active attack against Australia, and more a move to combat American influence in the region.
But it does send a clear message to us.
He suggested this may serve as a retaliation to Australia’s more aggressive stance on the rising superpower in recent times.
Chinese state media has attacked Mr Turnbull on several occasions for “standing up” against foreign interference in Australian politics, and for expressing concerns over China’s territorial aims in the South China Sea.
Just last month, Beijing accused Australia of becoming “an anti-China pioneer” over the past two years, accusing Mr Turnbull of “playing the China card”.
“The country’s unhealthy political environment prompts its politicians to play the China card,” the state-run Global Times editorial said. 

“Apparently, the above cannot be altered in the short run, and will exert long-term negative effects on Sino-Australian ties.”
According to Dr Lockyer, China’s response could be a reaction to that.
“Everyone knows this Melanesian region is vital to Australia. They (China) knew this would stir us up and make us feel very vulnerable, and if we felt vulnerable we might be less assertive,” he said.
“China’s media has been threatening us for a while now, and this is really hitting us where it hurts. It’s saying, ‘We know where you’re vulnerable, we know what you value, and we can hurt you there.’”
He also said China could be “holding up Australia as an example of a state that’s been naughty” to send a message to other countries in the region.
So what’s next?
It’s yet to be seen whether China will or plans to establish other bases in the region.
Dr Lockyer said Beijing acts opportunistically, rather than actively pursuing new military bases on a day-to-day basis.
“They’re setting up a network of close relationships around the world. If a door opens, then sure, they’ll take it,” he said.
But while Canberra does have some diplomatic and economic leverage, it may not be enough to contain Beijing if these “opportunities” continue to present themselves.