Shadow foreign minister says Australia should spend more in Pacific to counter rise of China

Labor’s shadow foreign affairs minister, Penny Wong, says the world is “rethinking how best to work with the US” and Australia should follow the lead of the US and New Zealand by stepping up its investment in the Pacific as China increases its assertiveness in the region.

Wong made the remarks in a speech to the US Studies Centre on Wednesday warning that the rise of China and the policies of the Trump administration meant there was “more competition and less cooperation” in our region.

Wong, who has just returned from Washington DC, noted the “compelling” events of the past few days including Trump criticising Nato for not spending enough on defence, his “mixed messages” in Britain and his summit with the Russian president, Vladimir Putin.

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Those “mixed messages” have also caused a split within the conservative section of the Coalition’s backbench, with Craig Kelly softening the line on Putin and Russia’s involvement in the downing of MH17, after his factional ally Tony Abbott earlier said that “Putin’s got blood on his hands” .

Speaking to Sky News on Wednesday, Kelly, who remains under a fierce preselection challenge for his New South Wales seat, said while he could sympathise with Anthony Maslin, a Perth father whose three children were killed when MH17 was downed, it was important Russia and the US had an open dialogue.

Maslin’s three children, Mo, Evie and Otis, along with their grandfather, Nick Norris, who was travelling with them, were among 38 Australians killed when their Malaysian Airlines flight was shot down over the Ukraine, four years ago this month. Subsequent investigations laid the blame on Russian-backed separatist fighters, which Australia has accepted.

“I am sure that any father who has lost three kids would be absolutely devastated but the reality is nothing is going to bring those three kids back,” Kelly said. “So what is best for the continued future of the world – and it is best in my opinion that the leader of the USA and the leader of Russia at least have a good talking relationship.

“And if that means some of the things that Russia has gotten away with in the past has to be slightly looked over, well, I am sorry. That is the price we have to pay, sometimes, to have good relations going forward.

“We can’t fix things that happened in the past. We have to make sure that the relationships, between Russia and the USA, going forward [are] the best they can possibly be.”

Kelly’s stance marks a shift from Abbott’s, who told Sydney’s radio 2GB on Wednesday afternoon that “Putin’s got blood on his hands” and criticised how Trump handled his meeting with the Russian president.

“My fundamental issue is that Vladimir Putin is a ruthless dictator and when the leader of the free world meets with a ruthless dictator it shouldn’t be all smiles,” he said. “I’m not saying that he shouldn’t meet with Putin, because they’re the two biggest nuclear powers in the world … but let’s be under no misapprehensions about the nature of Putin and Putin’s Russia.”

Wong said the world was “rethinking how best to work with the US” and coming to terms with the imposition of tariffs on trade – as well as Trump’s withdrawal from the Trans-Pacific Partnership, the Paris agreement on climate change and the Iran nuclear deal.

While the Trump presidency was a particular “change point”, Wong noted Australia was also being disrupted by “more sustained and structural shifts in the world”, including the changing relative economic weight of the US and China.

Under the leadership of Xi Jinping, China has “evinced increasing assertiveness in pressing its interests”, she said.

“It has also demonstrated its belief as to its right to a greater role in the region.”

In one of the most significant flashpoints of China’s assertiveness, Australia has objected to its militarisation of the South China Sea. Reports of China’s navy challenging Australia’s warships has led to warnings it may seek to close the area off to bolster its territorial claim, which was rejected by the court of arbitration in The Hague.

Wong said Australia should approach China “with respect not fear” but added it “is not a democracy [and] does it share our commitment to the rule of law”.

The Australian people expected the government to protect “the nation’s economic and strategic interests” but, unlike the US, Australia had to “prioritise trade and engagement with other markets”, she said.

Wong said Australia wanted a system where “rules not power determine actions and outcomes” not “hegemony which neither safeguards sovereignty nor respects difference”.

Australia and others in the region must ensure “the US recognises that it is integral to the region” because as “the world’s only current global power [it] has a stabilising role to play in Asia”.

Wong said that there was an “obvious need” in the region for greater infrastructure investment, particularly in the Pacific Islands.

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She noted that in November the US Overseas Private Investment Corporation and the Japan Bank for International Cooperation agreed to increase investment in infrastructure in the region, and in June New Zealand announced a new strategic international development fund to do the same.

“I welcome these announcements as important steps to addressing the deficit in infrastructure investment in the region,” she said. “The Australian government would do well to seriously consider similar initiatives.”

China’s Belt and Road Initiative is a multibillion-dollar infrastructure campaign that looks set to transform large parts of Asia and the Pacific, increasing China’s geo-strategic influence, and prompting warnings that smaller nations will become dependent on it for investment.

In June Australia helped fund an undersea cable to the Solomon Islands and Papua New Guinea in a move directed at countering growing Chinese influence in the Pacific.

Opic, the US government’s development finance institution, currently has about $4bn invested across the Indo-Pacific region.

Opic’s executive vice president, David Bohigian, recently visited its projects in Indonesia and will visit Thailand and Singapore to meet Japanese and Australian officials to discuss trilateral partnerships for investment in the region.