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‘It’s debt-trap diplomacy’: China’s strategic interference in the Pacific

China’s ambassador has called Julie Bishop’s latest remarks on China “ridiculous” and accused Australia of having a Cold War “mindset” when it comes to the Chinese roll out of infrastructure  in the Pacific.

Earlier this week, Bishop suggested Beijing may be threatening the sovereignty of Pacific nations by building unnecessary infrastructure that leaves them saddled with debt. This is giving China considerable leverage in the region.

Dr Malcolm Davis from the Australian Strategic Policy Institute says it’s good to see Australia finally waking up to China’s strategic interference.

“We’re recognising what China’s doing in the region. It’s called debt-trap collection,” explains Davis.

“The debt is essentially no strings attached, until the point whereby you are required to pay back that investment. The Chinese then say ‘if you can’t repay it, we’ll take the assets for 99 years.’”

“That is the problem.”

If Pacific nations continue to default on these concessional loans, there are fears China will expand its military presence into the region, compromising Australia’s national security.

“The South Pacific is really important because if the Chinese get a military presence there, it fundamentally changes our security calculus. We’d have a Chinese military force about 1,500 nautical miles from Sydney.”

“Maybe our attention has sort of waned a bit in the South Pacific when it shouldn’t have, and so China has rushed in to fill that void.”

Click PLAY below for the full interview

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