AUSTRALIA recently announced that it would develop a new white paper on foreign policy—its first since 2003—reflecting recognition of both a sense of drift in its traditional partnerships and an array of strategic challenges that did not exist 13 years ago. Nowhere is this more evident than in the South Pacific, an expansive, sparsely populated region that Australia has long considered its own backyard. “Our relationships in the South Pacific have drifted off course,” says Michael Wesley, a national-security expert at the Australian National University. “There’s no real sense of an Australian agenda of what we want to achieve.” The most obvious test in the Pacific is dealing with China. Since convening the first China-Pacific Island Countries Development Forum in 2006, China has disbursed nearly $1.8 billion in aid and investment to Pacific countries, building roads and hospitals and opening mines. More is planned as part of the “Maritime Silk Road” strategy.

Debate rages in Australia about how worrying this is. China has no territorial claims in the South Pacific, unlike in the East and South China Seas. Chinese naval visits to the region are handled cautiously, and Chinese diplomats are wary of antagonising Australia and New Zealand. China’s activity in the area is seen by many as part of its global hunt for resources, alongside an innocuous desire to raise its diplomatic standing.

But as China’s special envoy to the Pacific islands himself points out, if resources were the only objective, the better strategy would be to abandon the Pacific and focus exclusively on Australia. China clearly has broader objectives. On occasion its officials give vent to their Pacific counterparts about American assertiveness and Australasian complicity. On a visit to Fiji in 2012, Wu Bangguo, a senior functionary, saluted the principle of non-interference, encouraged Fiji to adopt a “Look North” policy and complained about the “bullying” of small countries by big ones.

The audience would have been receptive. Frank Bainimarama, Fiji’s prime minister, who seized power in a coup in 2006 but has since been elected, is a thorn in Australia’s flank. He will not attend the upcoming Pacific Islands Forum, which includes Australia and New Zealand, and has established a rival regional organisation, the Pacific Islands Development Forum, which excludes them. He has also snubbed Australian efforts to broker talks on reconfiguring the regional architecture. Big, rich countries often have prickly relations with their smaller, poorer neighbours. Nowhere is that plainer than in the Solomon Islands, where Australia has endured accusations of neo-colonialism while running a military and police operation for the past 13 years. (Australia was actually the colonial administrator of both Papua New Guinea, or PNG, and Nauru.)

Talk to a Pacific-island official and you will invariably hear two things in quick succession. First, a paean to the strength of his country’s relationship with Australia, the close personal friendship he has with this or the other Australian politician and the deep esteem in which his people hold the Australian people. Then comes the catalogue of grievances: we give Australians visas on arrival but they don’t do the same for us; Australian politicians just turn up in our country and expect to meet high-ranking government officials; when political disagreements surface, the Australian government, as one diplomat complains, “uses aid as a whip”.

Australia’s refugee policy has only deepened such feelings. For most of the past 15 years Australia has sent asylum seekers who arrive “spontaneously”—by boat and without a visa—to detention centres it runs in PNG and Nauru. There hundreds have stayed, often for years, as Australia tries to entice third countries into accepting them or the migrants into giving up and going home. Fiji’s foreign minister calls that policy “inconsiderate, prescriptive, high-handed and arrogant”.

PNG has accepted several dozen refugees; Australia may have hoped it and other Pacific countries would accept more, but that prospect has stirred ill will. A provincial governor in PNG complained on an Australian radio programme that accepting refugees in exchange for Australian cash is “basically forcing ourselves to grovel at the feet of Australian neo-colonialism”. In mid-August Australia announced that it would close the camp in PNG, but did not say when or where the refugees would go.

The longer the saga drags on, the more leverage Australia loses in the region. PNG is growing characteristically unruly as elections approach, this time over allegations of corruption directed at Peter O’Neill, the country’s prime minister. Australia’s response has been unusually subdued, which many attribute to its desire to keep the government of PNG onside. For similar reasons Australia has found it difficult to confront Nauru’s government as it sacks senior judges and suspends opposition MPs. Australia’s lofty rhetoric about transparency and good governance looks hypocritical to the entire region, thanks to the secrecy and backroom dealings surrounding its refugee policy.

This state of affairs would seem to leave the Pacific open to wooing by a rival suitor, skilled at persuasion and the rosy-fingered arts of soft power. Fortunately for Australia, its rival is China. Countries that initially welcomed Chinese loans for infrastructure projects, coming as they do without political conditions, have grown nervous at the scale of their debt. The sight of Chinese workers building roads while domestic economies wobble has stirred popular resentment, as have Chinese purchases of local assets and businesses. China’s efforts to whip up support among Pacific nations for its position on the South China Sea have failed: only Vanuatu, long in China’s camp, has rallied to its side, while Fiji and PNG have remained steadfastly neutral. Still, Australia is clearly rattled: a white paper on defence published earlier this year declares an intention to “work with Pacific Island countries” to “limit the influence of any actor from outside the region with interests inimical to our own”.