Vanuatu's Foreign Minister has denied the country is in talks with China about a possible military base in Vanuatu and said its Government was not interested in any militarisation of the country.
Australia has warned Vanuatu against any moves to allow a greater Chinese military presence in the Pacific nation.
"If it turns out there are one or more Chinese bases. what it has the ability to do is challenge, and make much more challenging, American access into the region", the Sydney Morning Herald quoted Charles Edel, a former adviser to former U.S. secretary of state John Kerry, as saying. Chen Ke, a spokesman for the ambassador to Vanuatu, also explained that China's presence in the Pacific was purely for humanitarian purposes and also spoke about a planned disaster response exercise between New Zealand, Vanuatu and China.
Jonathan Pryke, a Pacific islands expert with the Lowy Institute, said the Luganville wharf had "raised eyebrows in defence, intelligence and diplomatic circles" in Canberra because while its stated objective is to host cruise ships, it had the potential to service naval vessels as well.
The prospect of a Chinese military outpost so close to Australia has been discussed at the highest levels in Canberra and Washington, Fairfax said.
Australian Foreign Minister Julie Bishop on Tuesday said Vanuatu officials said there had been no formal offer from Beijing, but did not address whether there had been any unofficial talks.
"I remain confident that Australia is Vanuatu's strategic partner of choice", she said.
If the reports were correct, New Zealand had a number of ways it could raise its concerns, including in bilateral discussions, she said.
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Defence experts said a military base on Vanuatu, which would likely be followed by bases elsewhere, would allow the Chinese People's Liberation Army to challenge the US' post-war dominance of the Pacific, which is strongly supported by Australia and New Zealand. "We are not interested in militarisation, we are just not interested in any sort of military base in our country", he said.
"We would view with great concern the establishment of any foreign military bases in those Pacific island countries", Turnbull told reporters on Tuesday.
Academic director at Australian National University's National Security College Matthew Sussex said that while it wasn't surprising that China would have an interest in Vanuatu, the threat shouldn't be overstated.
Chinese financial aid in Vanuatu has so far focused on key infrastructure development, including Luganville International Wharf, on the island of Espiritu Santo, a large 300-meter docking facility that can accommodate two mid-sized freighters, or a single large cruise ship at any one time.
"The more you invest in the Belt and Road initiative, the more the Chinese are in a position to force your country to align politically in terms of policy", Davis told CNN a year ago, referring to China's ambitious One Belt One Road (OBOR) global development strategy.
While China has been investing in infrastructure around the world, to date it has only established one military base - in Djibouti on the Horn of Africa.
"We don't know what the consequences are when (Pacific nations) have to pay back some of these Chinese loans", she said.