Australia will set up a 2 billion Australian dollar infrastructure bank for projects in the region and spend a further 1 billion promoting exports and supporting Australian businesses in the Pacific, Prime Minister Scott Morrison said Thursday.

Morrison said it was time to "open a new chapter in relations with our Pacific family" and put the island states at the "front and center of Australia's strategic outlook, foreign policy."

Australia's aid dollars would be "stretched further" as infrastructural grants and loans in telecommunications, energy, transport [and] water, Morrison added.

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The media chorus coincided with a visit to Beijing by Australian Foreign Minister Marise Payne. She met her Chinese counterpart Wang Yi, who on a visit to Papua New Guinea last month said China would "never" interfere in local matters.

Australia-China mistrust

China has taken offense at new Australian law passed over claims of Chinese meddling in Australian politics, amid caution in Australia over Chinese stakes in telecoms and research projects and China's growing western Pacific naval presence.

Australia and the United States have military ties dating back to World War II. China recently denounced "Cold War thinking." Although sparsely populated, Pacific island nations have resource-rich ocean zones.

Naval base at Manus

Last week, Australia said it and Papua New Guinea (PNG) would jointly redevelop a naval base on PNG's Manus Island, eclipsing China as a possible port development partner.

The United States is already expanding its Marine Corps training hub at Darwin inshore of Australia's vast northern maritime borders with neighboring Indonesia and PNG as part of a strategic US pivot for Asia.

Infrastructure grants, loans

Australian public broadcaster ABC News said centerpiece of the new Australian prime minister's thinking would be a 2 billion Australian dollar (€1.3 billion) infrastructure bank for the Pacific.

Australia's Defence Force would set up a permanent training team for the Pacific and increase deployments. Extra diplomatic missions would be opened in French Polynesia, the Marshall Islands, Palau, Niue and the Cook Islands.

He would declare Australia's "abiding interest in a Southwest Pacific that is secure strategically, stable economically and sovereign politically," ABC News reported.

'Diplomatic backyard'

Australia's focus would be shifted to its "diplomatic backyard," said The West Australian newspaper, based in Perth on the continent's Indian Ocean rim.

China would not be explicitly mentioned by Morrison, but the "reorientation would go some way to countering the [Chinese] largesse flowing into tiny nations such as Fiji, Tonga, Vanuatu and the Solomon Islands from Beijing," said the West Australian.

Undersea cable to PNG

In May, Australia said it would spend about A$200 million to develop an undersea internet cable to Papua New Guinea (PNG) and the Solomon Islands as an alternative to an offer from China's Huawei telecommunications giant.

The commercial media chain News Corp. reported Thursday that Australia's new prime minister also wanted to get more Australian "content into the [Pacific] region."

Australia's competition commission on Thursday cleared a planned merger between New Corp.'s rival Fairfax Media and the television Network Nine.

ipj/sms (AP. Reuters, AFP)