Scott Morrison and his Papua New Guinea counterpart, Peter O’Neill, have signed off on a joint naval base to be located on Manus Island, in an effort by Australia to remain the country’s principal security partner at a time of rising Chinese influence in the region.

The joint facility, which crowds out an aspiration by Beijing to develop the port, was agreed between the two governments on Thursday, with details, including the costs of the project, to be worked out between officials.

Morrison used his first foreign policy speech as prime minister to underscore the importance of PNG and other countries in the region to Australia, characterising the Pacific as “family”.

“Just as important as the stability, prosperity and openness of south-east Asia is our engagement with our neighbours and family in the Pacific,” Morrison told the Asia Society on Thursday. “As family, we deal with each other openly and honestly, and above all with respect.

“But like all families we sometimes take each other for granted.

“The government I lead is committed to the Pacific as one of my highest foreign policy priorities, because this is where we live.

“This is a relationship that I want to see rise to a new level of respect, partnership, familiarity and appreciation.

“I want us to do better. I want to set right how we engage with our Pacific family – our vuvale, our whanau. I will not be taking our Pacific family for granted.”

Vuvale and whanau are words that mean “family” in Fijian and Maori, respectively.

Morrison also addressed Australia’s response to what has been characterised as China’s “soft power” grab in the Pacific – through loans and infrastructure projects delivered to the island nations – which has coincided with Australia’s shrinking foreign aid budget.

In response, Australia has moved to to offset China’s influence.

Most recently Australia agreed to mostly fund a necessary underwater internet cable for the Solomon Islands to lock the Chinese telecommunications company Huawei out of the deal, and the new naval base in PNG builds on that strategy.

Morrison and O’Neill also agreed to what the Australian prime minister described as a “long-term police partnership” on Thursday. The two leaders also agreed to a new annual leaders meeting.

Morrison used Thursday’s speech to argue Australia’s foreign policy has been, at times, “too transactional”.

“I fear foreign policy these days is too often being assessed through a narrow transactional lens”, he said. “If we allow such an approach to compromise our beliefs, we let ourselves down, and we stop speaking with an Australian voice.

“We are more than the sum of our deals, we are better than that.

Morrison said he did not believe Australia needed to choose between its most important economic partner, China, and the US, our most important strategic ally.

“The short answer is no, we don’t, we don’t feel like that at all,” he said. “It is one of those old maxims in politics; things are never as bad or never as good as you think they are.

“Does the United States want to have, at the end of the day, a more open, free trade environment where they can engage in the global economy? My honest answer to that is yes. Does China equally want to see prosperity in the region and the prosperity of their people? Of course they do. So you start there and you work back from that.”