Australia ramps up Pacific spending amid China debate

Australia will create a multi-billion dollar fund for Pacific island nations to build infrastructure, in an apparent attempt to counter China's influence.

Delivering a major policy speech, PM Scott Morrison said he aimed to restore the Pacific to the "front and centre" of Australia's foreign outlook.

Australia will offer up to A$2bn (£1.11bn; $1.45bn) in grants and loans to strengthen ties, he said.

In Beijing, China's top diplomat said the two countries were "not rivals".

After meeting Australian Foreign Minister Marise Payne in Beijing, top Chinese diplomat Wang Yi said the two countries should be co-operating in the Pacific.

The relationship between China and Australia has become strained over allegations of Chinese interference in Australian politics and Ms Payne's visit has been seen as an effort to resolve tensions.

Ms Payne said she had had "valuable, full and candid" discussions with Mr Wang, and said they would manage differences "respectfully".

But Mr Morrison's announcement on the same day of a major initiative targeted at the Pacific was seen by analysts as directed at rolling back China's growing influence.

"Australia cannot take its influence in the south-west Pacific for granted. I think, sadly, too often we have," he said. "This is our patch. This is where we have special responsibilities."

The fund could be used for telecommunications, energy and transport infrastructure projects, Mr Morrison suggested. He said he would also ask Parliament to pledged another A$1bn in regional investments providing "national benefit for Australia".

He added that Australia would expand its diplomatic posts and military ties, and broadcast more local TV programmes in the region.