November 7, 2018 / 10:53 PM / a month ago

Australia to create Pacific infrastructure fund in bid to counter China

SYDNEY, Nov 8 (Reuters) - Australia will create a A$2 billion ($1.46 billion) fund to provide loans to Pacific countries to build infrastructure, Prime Minister Scott Morrison will say on Thursday, as Canberra seeks to counter China’s rising influence in the region.

Australia and China have been vying for influence in the sparsely populated Pacific which controls vast swathes of resource-rich oceans.

China has spent $1.3 billion on concessionary loans and gifts since 2011 to become the Pacific’s second-largest donor after Australia, stoking concern in the West that several tiny nations could end up overburdened and in debt to Beijing.

To counter, Morrison will say Australia will renew its focus on the Pacific, primarily through a new infrastructure fund.

“This $2 billion infrastructure initiative will significantly boost Australia’s support for infrastructure development in Pacific countries and Timor Leste,” Morrison will say, according to a speech seen by Reuters. “It will invest in essential infrastructure such as telecommunications, energy, transport, water, and it will stretch our aid dollars further.”

$1 = 1.3746 Australian dollars Reporting by Colin Packham Editing by Leslie Adler

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