SYDNEY • Australia will soon offer millions of dollars in funding for infrastructure projects in the Pacific Islands, two sources told Reuters, as part of its efforts to undercut Chinese influence.
Canberra has long enjoyed nearly unchecked prominence in the Pacific, but its position has been challenged by China in recent years as Beijing increases its aid to the sparsely populated region that controls vast swathes of the resource-rich ocean.
China denies it is seeking a sphere of influence in the Pacific, insisting it gives aid to help with the countries' economic development.
Australian Prime Minister Scott Morrison last year said the country would create a fund to offer Pacific countries up to A$3 billion (S$2.8 billion) in cheap loans and grants to cement its position in what he declared was "our patch".
The fund will be operational by July 31, and Australia plans to quickly approve several projects to demonstrate its commitment, the sources said.
"We haven't finalised which projects will be approved first, but the plan is to have them rubber-stamped quickly," said a source.
The Australian investment will be channelled into telecommunications, energy, transport and water projects. The funding commitments will come just before Mr Morrison travels to the island of Tuvalu for the annual Pacific Islands Forum in August.
Tuvalu is one of six Pacific islands that recognise Taiwan, which Beijing views as a Chinese province with no right to diplomatic ties.
In recent months, China has intensified its lobbying of those countries to adopt the one-China principle, and switch their diplomatic relations to Beijing.
Mr Morrison late last month became the first Australian prime minister to visit the Solomon Islands, another Pacific country that recognises Taiwan.