Entrepreneur May Sell Strategic Pacific Islands to Chinese Interests

A private Australian businessman is preparing to sell a chain of 21 coral atolls located some 500 nm to the northeast of Cairns, Australia - to Chinese interests. 

Ian Gowrie-Smith, a retired entrepreneur who had a hand in oil, gas, mining and pharmaceutical ventures over the decades, is the owner of the Conflict Islands in Papua New Guinea. Located between the Solomon Sea and the Coral Sea, the small island chain is home to 30 permanent inhabitants, a turtle conservation program, a small resort, and enough land for a 3,000-meter strategic runway. 

Gowrie-Smith confirmed to Australia's 9 Now that his agents are in conversation with Chinese buyers about a potential sale. The price under discussion is about US$25 million, and he has offered to negotiate with the Australian government about selling at a discount, given the potential national security implications of a Chinese facility next to Australia's northwestern shipping lanes.

Australian politicians have recently expressed serious concerns about China's new security deal with the government of the Solomon Islands, which could include basing arrangements for Chinese security forces. The Conflict Islands are even closer, by about 300 nm, and Gowrie-Smith expressed curiousity about why the Australian government wasn't interested in making a deal that would put the islands in Australian hands.

Any Chinese presence in the Conflict Islands would be subject to the governance of Papua New Guinea; China is New Guinea's biggest customer for natural resource exports, and the two nations have recently entered discussions about a free trade deal. 

China has a history of building island military bases on coral atolls in the South China Sea, constructing them first as civil facilities before deploying air defense and anti-ship missile systems. The PLA Navy is also believed to be pursuing a basing agreement at Cambodia's Ream Naval Base, once the site of American military aid investment. Beijing's ambitions extend to the strategic islands of the South Pacific: in June, Chinese Foreign Minister Wang Yi conducted a grand tour of the Solomon Islands, Fiji, Kiribati, Samoa, Tonga, Vanuatu, Papua New Guinea and Timor-Leste to press a joint "marine spatial plan." If accepted, the plan would have given China a greater role in regional maritime affairs - but it was turned down.