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Inside China’s bold plan to build a $39BILLION city on Australia’s doorstep

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A Chinese company has lodged a proposal to build a $39billion city on Australia’s doorstep, in a move that’s 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 development project would also house a resort for tourists and vast residential areas.

A Chinese company has lodged a proposal to build a $39billion city on Australia’s doorstep, in a move that’s likely to make Australian national security analysts nervous. Pictured: Chinese President Xi Jinping

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 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

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 New Daru City, the potential contract 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 for a designated period of time.

Over the past year Australia has become the target of an increasingly aggressive and belligerent Beijing.

China 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 and the subsequent cover-up which was attempted by Communist Party officials.

With Beijing now looking to set up a mega city in Australia’s backyard as the diplomatic relationship continues to deteriorate, it’s feared China could have an ulterior motive with secret plans to turn the area into a naval base.  

Under the proposal for New Daru City, the Communist Party-backed firm would have total ownership of the venture for a designated period of time. Pictured: Children jump over a dirty drain on the PNG island of Daru

Under the proposal for New Daru City, the Communist Party-backed firm would have total ownership of the venture for a designated period of time. Pictured: Children jump over a dirty drain on the PNG island of Daru

It is feared China could have an ulterior motive with secret plans to turn Daru (pictured) into a naval base

It is feared China could have an ulterior motive with secret plans to turn Daru (pictured) 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.  

How China’s feud with Australia has escalated

2019: Australian intelligence services conclude that China was responsible for a cyber-attack on Australia’s parliament and three largest political parties in the run-up to a May election.

April 2020: Australian PM Scott Morrison begins canvassing his fellow world leaders for an inquiry into the origins of the coronavirus pandemic. Britain and France are initially reluctant but more than 100 countries eventually back an investigation. 

April 15: Morrison is one of the few leaders to voice sympathy with Donald Trump’s criticisms of the World Health Organization, which the US president accuses of bias towards China. 

April 21: China’s embassy accuses Australian foreign minister Peter Dutton of ‘ignorance and bigotry’ and ‘parroting what those Americans have asserted’ after he called for China to be more transparent about the outbreak.  

April 23: Australia’s agriculture minister David Littleproud calls for G20 nations to campaign against the ‘wet markets’ which are common in China and linked to the earliest coronavirus cases.  

April 26: Chinese ambassador Cheng Jingye hints at a boycott of Australian wine and beef and says tourists and students might avoid Australia ‘while it’s not so friendly to China’. Canberra dismisses the threat and warns Beijing against ‘economic coercion’. 

May 11: China suspends beef imports from four of Australia’s largest meat processors. These account for more than a third of Australia’s $1.1billion beef exports to China. 

May 18: The World Health Organization backs a partial investigation into the pandemic, but China says it is a ‘joke’ for Australia to claim credit. The same day, China imposes an 80 per cent tariff on Australian barley. Australia says it may challenge this at the WTO. 

May 21: China announces new rules for iron ore imports which could allow Australian imports – usually worth $41billion per year – to be singled out for extra bureaucratic checks. 

June 5: Beijing warns tourists against travelling to Australia, alleging racism and violence against the Chinese in connection with Covid-19.  

June 9: China’s Ministry of Education warns students to think carefully about studying in Australia, similarly citing alleged racist incidents.   

June 19: Australia says it is under cyber-attack from a foreign state which government sources say is believed to be China. The attack has been targeting industry, schools, hospitals and government officials, Morrison says.

July 9: Australia suspends extradition treaty with Hong Kong and offers to extend the visas of 10,000 Hong Kongers who are already in Australia over China’s national security law which effectively bans protest.

August 18: China launches 12-month anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry. 

August 26: Prime Minster Scott Morrison announces he will legislate to stop states and territories signing deals with foreign powers that go against Australia’s foreign policy. Analysts said it is aimed at China.

October 13: Trade Minister Simon Birmingham says he’s investigating reports that Chinese customs officials have informally told state-owned steelmakers and power plants to stop Aussie coal, leaving it in ships off-shore.

November 2: Agriculture Minister David Littleproud reveals China is holding up Aussie lobster imports by checking them for minerals.

November 3: Barley, sugar, red wine, logs, coal, lobster and copper imports from Australia unofficially banned under a directive from the government, according to reports.

November 18: China releases bizarre dossier of 14 grievances with Australia. 

November 27: Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports where they have been denied entry. 

November 28: Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ or sold at below-cost. The claim is denied by both Australia and Chinese importers. 

November 30: Chinese foreign ministry spokesman Lijian Zhao posted a doctored image showing a grinning Australian soldier holding a knife to the throat of an Afghan child. The move outraged Australians. 

December 12: Australian coal is added to a Chinese blacklist.

December 24: China suspends imports of Australian timber from NSW and WA after local customs officers say they found pests in the cargo.

January 11, 2021: Australia blocks $300million construction deal that would have seen state-owned China State Construction Engineering Corporation takeover Probuild. The bid was blacked over national security concerns.

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