CANBERRA, Australia — Australia announced Thursday it will invest in redeveloping a Papua New Guinea naval base as concerns mount over increasing Chinese influence in the South Pacific.

Australian Prime Minister Scott Morrison and his Papua New Guinea counterpart, Peter O’Neill, met in Sydney to sign the joint redevelopment agreement for the Lombrum Naval Base on Manus Island.

The deal will enhance interoperability between the near-neighbors' militaries and lead to more Australian naval visits, the leaders said in a statement.

"I want to strengthen our engagement with the Pacific for the Pacific's sake because this is our home," Morrison said in a foreign policy speech.

Australia will inevitably need to navigate a higher degree of strategic competition between the United States, its most important defense ally, and China, its biggest trading partner, Morrison said.

U.S. Chief of Naval Operations Adm. John Richardson, who is visiting Australia for talks on regional security and the Indo-Pacific region, described the base redevelopment as a "terrific opportunity."

"It's a great example of the leadership that Australia and the Royal Australian Navy is exercising in this region," he told reporters.

"From the U.S. Navy's perspective, we look forward to identifying opportunities where we can support that," he added.

Richardson said it was too early to tell if U.S. warships would eventually use the port.

"You can see nothing but potential going forward and we'll just have to see how the details manifest themselves," he said.

The United States is expanding its Marine Corps training hub in the northern Australian city of Darwin — 1,600 kilometers (1,000 miles) southwest of the Papua New Guinea capital Port Moresby — as part of its strategic pivot to Asia.

In May, then Australian Prime Minister Malcolm Turnbull warned China that Australia "would view with great concern the establishment of any foreign military bases in those Pacific island countries and neighbors of ours."

He was commenting after China and Vanuatu denied media reports that the Chinese had approached the former joint British-French colony, which has a population of 280,000, about building a permanent military presence in the South Pacific.

The United States, Australia and Japan are cooperating on a domestic internet cable proposal for Papua New Guinea as an alternative to an offer by Huawei, the Chinese telecommunications giant that the United States regards as a cybersecurity threat.

The Australian government blocked Huawei in August from rolling out Australia's 5G network due to security issues and has concerns about the company's involvement in the telecommunication infrastructure of its nearest neighbor, Papua New Guinea.

Chinese Foreign Minister Wang Yi visited Port Moresby on Thursday and rejected criticisms that China was using aid and investment in the South Pacific to buy political influence.

“We never interfere in other countries' domestic affairs and our assistance never comes with political conditions,” Wang told reporters.

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