Australia revamps overseas aid policy to counter China

Details of the overhaul – the first in a decade – were released today as Prime Minister Anthony Albanese weighs up meeting Chinese President Xi Jinping next month.

The new foreign aid policy, prepared by the Department of Foreign Affairs and Trade (DFAT), puts a big emphasis on gender equality and climate action.

All new international development projects worth more than $3 million will have to include a gender equality objective.

And from mid-2025, half of new investments worth more than $3 million must contain a climate change objective.

Foreign Minister Penny Wong said the new overseas aid policy was in the interests of Australia and its Pacific neighbours.

“Australia is using all elements of our national power to advance our interests and shape the world for the better,” she said.

“Development and prosperity underpin peace and stability.

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“This new policy reflects who we are. Australia is there, not only in times of crisis, but is working with the region to strengthen its resilience and to help deliver its aspirations.”

But DFAT officials have also highlighted the growing economic problems and the important role of Australia investment in the region, with public debt across the Pacific forecast to double from 2019 to 2025. 

A large chunk of that debt is owed to the government of China or Chinese banks under its controversial Belt and Road infrastructure initiative.

Critics say Beijing has used it to create a ‘debt trap’ aimed at increasing Chinese leverage over Pacific nations.

Albanese told Parliament he was hoping to meet Xi on the sidelines of the G20 summit in India next month.

Last year they met during the G20 summit in Bali, the first such meeting between Australian and Chinese leaders since 2016.