China's Growing Clout Looms Over Trump’s Dinner With Australia’s Leader

(Bloomberg) — Australian Prime Minister Scott Morrison’s lavish visit to the White House on Friday — including the second State Dinner of Donald Trump’s presidency — comes at a critical time as both nations seek to counter China’s growing influence in the South Pacific.

A day of meetings and the formal Rose Garden dinner — the first for an Australian leader since 2006 — give Morrison the opportunity to remind Trump that new challenges to regional security are emerging seven decades after their nations’ alliance was cemented in World War II.

While China’s growing economic might is the main catalyst of Trump’s trade war, diplomats in Washington and Canberra are increasingly concerned about Beijing’s geopolitical ambitions. There are signs China’s influence is spreading beyond the South China Sea to the Pacific Islands, a region traditionally under U.S. hegemony and on Australia’s doorstep.

“Both countries have taken a long time to recognize the gravity of the challenge China poses in Asia and must now make hard choices to place real resources behind new initiatives in the region,” said Ashley Townshend, director of the foreign policy and defense program at the University of Sydney’s United States Studies Centre.

China’s growing influence in the region was displayed in the past week, when the Solomon Islands broke off diplomatic ties with Taiwan in favor of Beijing.

Military Bases

Since 2011, China has spent at least $1.6 billion in loans and aid to develop 265 projects in the Pacific Islands, according to research by the Sydney-based Lowy Institute. While that’s dwarfed by the $8.6 billion spent by Australia and the U.S., mainly on programs to improve governance, education and health services, China has gained an advantage by funding and building much-desired transport and utility infrastructure.

The U.S. is concerned Beijing’s end-game is to lure nations into debt traps as leverage to establish military bases in the region.

Both Morrison and Trump are trying to counter China’s growing reach. Late last year, Australia unveiled a A$2 billion ($1.4 billion) infrastructure fund for the region, while the U.S. joined a group that includes Japan, the European Union and the Asian Development Bank to fund projects. Secretary of State Michael Pompeo last month visited Micronesia, where he held security talks with the Pacific Island leaders.

But according to Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Canberra, more needs to be done.

“It’s really difficult to stop China in its tracks in the Pacific and we’re seeing that for some of these nations it’s very easy to be swayed by money,” said Davis. In his talks with Trump, “Morrison needs to make sure he makes every point a winning point. The U.S. needs to engage more resources in the region, that means a military step up as well as increased investment and foreign aid.”

Pollution, Moon Cooperation

Trump administration officials say their defense discussions with Australia will also involve joint work on top foreign policy priorities of the president, including Australian assistance in maintaining freedom of navigation in the Strait of Hormuz as the U.S. weighs a response to the recent attack on Saudi Arabia’s oil facilities that U.S. officials have blamed on Iran. The leaders will also discuss joint efforts to address North Korea’s nuclear weapons program, according to a U.S. official who requested anonymity to discuss the upcoming meeting.

But the White House also envisions discussions on cooperation in space, with an anticipated memorandum of understanding between NASA and Australia’s space agency on joint efforts to return to the moon by 2024, as well as automation and robotics technologies. This push comes despite Trump in June raising questions about NASA’s efforts to return to the moon — even though he previously directed the agency to pursue that mission.

The leaders are also expected to roll out joint programs to address recycling and waste management, with a particular eye toward reducing plastic waste in oceans that threaten the Great Barrier Reef and U.S. shorelines.

And Australia and the U.S. will seek to further counter Chinese influence by rolling out a new plan to improve the supply and security of rare earths — the vital elements needed in components for missile systems and consumer electronics. U.S. officials have surveyed sites in the Australian Outback region for new supplies after China signaled it could restrict shipments as part of the ongoing trade war. Earlier this summer, Trump ordered the Pentagon to spur production of a slew of rare-earth magnets used in consumer electronics, military hardware and medical research, amid concerns China will restrict exports of the products.

Warm Welcome

The last time an Australian leader received such a welcome in Washington was in 2006 when John Howard was hosted to a State Dinner by his close friend George W. Bush. Howard, who was visiting Washington when the Sept. 11 attacks occurred in 2001, was one of the first global leaders to pledge support for America’s war against al-Qaeda in the Middle East.

Morrison’s visit will include an elaborate welcome ceremony on the South Lawn, a gift exchange, a bilateral meeting that includes the two countries’ first ladies in the Oval Office, a State Department Lunch hosted by Pompeo and Vice President Mike Pence, and a midday press conference at the White House.

Morrison’s invite is another sign that relations with the U.S. president are off to a good start. Four months ago, Trump tweeted his congratulations to Morrison for a “GREAT WIN!” in Australia’s election, which like the president’s own victory came as a surprise to pundits. Both are conservatives with a strong Christian voter base. The only other State Dinner Trump has hosted was for French President Emmanuel Macron in April 2018.

Australia has stood with American forces in every major conflict in the past 100 years. The Pine Gap facility in central Australia hosts a joint U.S.-Australia defense station used in global surveillance. Since the Howard-Bush era, the alliance between the Five Eyes intelligence partners has deepened. In 2011, then President Barack Obama secured a deal to base about 2,500 Marines in the northern Australian port of Darwin.

Morrison’s government last month announced it would send military personnel, a frigate and surveillance plane to aid the U.S.-led coalition to protect ships passing through the Strait of Hormuz.

Government officials in Canberra believe the red-carpet treatment for Morrison shows Trump recognizes Australia as an ally that pulls its weight and regards it as a model trading partner.

Morrison is expected to meet intelligence officials at the Pentagon, inspect an Ohio paper-recycling mill built by Australian billionaire Anthony Pratt, attend an anti-terrorism event hosted by French President Emmanuel Macron in New York, and meet with other global leaders on the sidelines of the United Nations General Assembly, which he is scheduled to address on Wednesday.

To contact the reporters on this story: Jason Scott in Canberra at jscott14@bloomberg.net;Justin Sink in Washington at jsink1@bloomberg.net

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Edward Johnson, Joshua Gallu

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