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A Chinese company has lodged a proposal to build a $39billion city on Australia’s doorstep, in a move that is likely to make Australian national security analysts nervous.
The plan revealed in leaked documents would see a shining new city constructed on the Island of Daru in Papua New Guinea – just 200km north of Australia’s Cape York in the Torres Strait.
The Beijing-backed Hong Kong registered company, WYW Holding Limited, are behind the scheme which was submitted to the PNG government in April last year.
If approved, ‘New Daru City’ would include a major sea port, an industrial zone as well as a commercial business precinct.
The 100km square construction project would also house a resort for tourists and vast residential areas.
It comes after the Fujian Zhonghong Fishery Company, which is controlled by the Chinese government, recently inked a memorandum of understanding with the Papua New Guinean government to build a $204million fishery complex in Daru – an area of Papua New Guinea which has no commercial fisheries.
Under the proposal for the New Daru City, the potential contract would between to begin building would be ‘predicted on an agreed Sovereign Guarantee based on a long-term BOT [Build Operate Transfer] contract’.
This means the Communist Party-backed firm would have total ownership of the venture while the project for a designated period of time.
Over the past year Australia has become the target of an increasingly belligerent Beijing.
China has imposed a litany of unofficial bans and arbitrary tariffs on billions of dollars worth of Australia exports after Canberra called for an inquiry into the origin of the coronvirus pandemic.
With Beijing now looking to set up a mega city in Australia’s backyard, it’s feared China could have an ulterior motive with secret plans to turn the area into a naval base.
WYW Holding Limited said in the documents they had already began ‘preliminary discussions with representatives of Western Province’.
But any plans to build such and ambitious project would be met with immense difficulty.
Daru, with a population of about 20,000 is currently in the midst of tuberculosis epidemic and the region is critically underdeveloped.
Michael Shoebridge, the national security program director of the Australian Strategic Policy Institute’s said China and it’s corporate proxies often approach provincial governments to try and get controversial infrastructure projects off the ground – as they less security conscious than national administrations.
The authoritarian regime tried a similar move in Australia when Victorian Premier Danial Andrews signed a Memorandum of Understanding on the Belt and Road Initiative – a decision which was later overruled by the federal government on the grounds of national security concerns.
‘The big message is really that Australian policymakers and leadership cannot be complacent in any way about Chinese presence and intent in PNG,’ he told the Australian.
‘Chinese entities and actors are demonstrating that they are opportunistic and entrepreneurial, and the environment is a reasonably permissive one for that kind of behaviour.’
Chinese development projects under the President Xi Jinping’s Belt and Road Initiative have long been met with skepticism by democratic Western nations.
The global infrastructure scheme launched in 2013 hands out huge loans to impoverished nations already laden with debt in expectation of support for its strategic objectives.
International observers have described the initiative as ‘debt-trap diplomacy’.
In the case of PNG, the cost of building New Daur City would be $5billion above the entire nation’s GDP.
Nations on Australia’s doorstep in the South Pacific region have been a central focus of China.
‘Our research shows that the small and fragile economies of the Pacific are among the most vulnerable to potential debt problems, while several Pacific countries already appear to be among those most heavily indebted to China anywhere in the world,’ analysts from the Lowy Institute’s Pacific Islands Program wrote.
‘Our analysis suggests that China’s lending practices in the Pacific have not been so problematic as to justify accusations of debt trap diplomacy – at least not yet.
But Mr Pryke said ‘the sheer scale of lending, combined with inadequate controls’ will make it difficult to avoid ‘potentially unsustainable loans’.
Australia’s northern neighbor – the Solomon Islands – joined the Belt and Road Initiative after switching its diplomatic allegiance from Taiwan in October 2019.
A report by the ABC in February 2020 revealed the nation was also in discussions with a Chinese businessman for a $151 billion dollar loan – and amount 77 times the country’s annual GDP.
The Prime Minister of PNG, James Marape, has played coy about the proposed deal, claiming he is ‘unaware’ of the project.
But his spokesperson PNG will not stand in the way of benificially foreign investment.
‘If a foreign investor wants to come to PNG with multimillion Kina investments, PNG will not stop them, on condition that all our laws are complied with and local Papua New Guineans benefit from these types of projects,’ the spokesman said.
More to come.
