Post by : Meena Ariff

Australia has started investigating whether a new agreement signed between the Pacific island nation of Nauru and a Chinese company violates a recent security treaty between the two countries. The deal, worth around US$650 million, was signed last week and has sparked discussions about the future of Australia’s role as a key security partner in the Pacific.

Background of the Security Treaty

In December 2024, Australia and Nauru signed a landmark security treaty. This agreement was part of Australia’s larger plan to strengthen its role in the Pacific region and limit China’s growing influence.

Under the treaty, Nauru is required to seek Australia’s approval before entering into bilateral agreements related to:

• Maritime security

• Defence cooperation

• Policing matters

The treaty also requires Nauru to consult with Australia if any other country wants to sign agreements related to:

• Access to ports and airfields

• Critical infrastructure

• The banking sector

In exchange, Australia provides tens of millions of dollars each year to support Nauru’s budget and help strengthen its small police force.

The New Chinese Deal

Despite this treaty, Nauru announced last week that it had signed a US$650 million economic development agreement with the China Rural Revitalisation and Development Corporation.

According to Nauru’s government, the investment will target major sectors such as:

• Agriculture

• Fisheries

• Other areas are important for the country’s economy and daily needs

The deal was signed in Beijing by Nauru’s Foreign Affairs Minister, Lionel Aingimea. This move comes just months after Nauru surprised many observers by cutting off its long-standing diplomatic ties with Taiwan and shifting recognition to Beijing in early 2024.

Australia’s Concerns

Australia’s Minister for Pacific Island Affairs, Pat Conroy, confirmed that Canberra is carefully looking into whether this Chinese deal violates the terms of the treaty signed last year.

“(Australia) is engaging with the government of Nauru about whether it activates parts of our treaty,” Mr. Conroy explained. He also added that the treaty is very important for Australia because it strengthens its position as the “security partner of choice” for Nauru.

The key question for Australia is whether this Chinese deal gives Beijing access to Nauru’s critical infrastructure or control over strategic sectors that might fall under the treaty.

Nauru’s Position

Nauru, with a population of only around 12,500 people and a total land area of just 20 square kilometres, is one of the world’s smallest countries. Despite its small size, it has often played an outsized role in Pacific diplomacy.

The country has limited natural resources and depends heavily on foreign aid and international partnerships for survival. This makes it especially vulnerable to economic pressures and attractive to countries like China, which has been offering large-scale investments across the Pacific.

Nauru also faces serious challenges from climate change, as rising sea levels and extreme weather events threaten its very existence. For this reason, economic assistance and development projects are crucial for its government.

China’s Growing Role in the Pacific

China has been steadily expanding its presence in the Pacific Islands through trade, aid, and infrastructure projects. By signing this new agreement, Beijing has strengthened its influence in Nauru shortly after winning its diplomatic recognition away from Taiwan.

This development is closely watched by Australia and its allies, as they fear China’s deeper involvement in the region may shift the balance of power and undermine traditional partnerships.

What Happens Next

The Australian government is now reviewing the fine print of the agreement to see whether it crosses the red lines set by the treaty. If Australia decides that the deal breaches the treaty, it could trigger consultations or even formal action under the pact.

For Nauru, balancing the benefits of Chinese investment with its obligations under the treaty will be a delicate task. The island’s leaders will have to manage relationships with both Beijing and Canberra, while also ensuring that their citizens benefit from the promised development projects.

The US$650 million Chinese investment in Nauru has opened a new chapter in the Pacific’s ongoing contest for influence. Australia’s response will determine not only the future of its partnership with Nauru but also its standing as the leading security partner in the region.