U.S. Asia Pivot May Help China, Australia Opposition Says

China may benefit from an increased U.S. military role in the Asia-Pacific region because it will help secure raw material supplies that drive the world’s second- biggest economy, Australia’s shadow defense minister said.

“By expanding our defense posture and disposition and capability, we guarantee maritime security,” David Johnston, defense spokesman for the opposition Liberal-National coalition, said in an interview yesterday in Canberra. “We’re sending massive amounts of energy to China.”

The U.S. is increasing its military presence in the region, including deploying 2,500 Marines in northern Australia, as China’s influence expands. A greater American presence in the region would help to bolster defense of the northwest coast, the heart of the nation’s resources boom, said Johnston, whose party leads Prime Minister Julia Gillard’s Labor in polls ahead of an election next year.

Western Australia generates more than A$80 billion ($84 billion) in mineral export revenue a year and has mining and infrastructure projects worth more than A$130 billion under way, according to the state’s government. Chevron Corp. (CVX) is partnering with Exxon Mobil Corp. and Royal Dutch Shell Plc (RDSA) to build the A$43 billion Gorgon liquefied-natural-gas project off the coast, in an area called the Northwest Shelf.

Australia, the biggest supplier of China’s iron ore and coal, needs to ensure that overseas powers or terrorists don’t threaten resource projects, Johnston said. He didn’t specify which countries or groups could pose a threat.

Expand Maritime Facilities

“One thing that China needs to understand is that the three biggest investors in the Northwest Shelf -- Chevron, Exxon Mobil and Shell -- all have a massive U.S. pedigree,” said Johnston, a senator who represents the state of Western Australia. “We need to secure our maritime environment so we can continue to be a really reliable supplier” of resources, he said.

Johnston said a coalition government would push to expand maritime facilities in the western town of Exmouth on the Indian Ocean, in the vicinity of its resource projects. He said his party also favored increasing defense outlays after the government announced in May it would cut spending on the portfolio by A$5.4 billion over four years in a bid to return the federal budget to surplus.

Chinese ownership of Australian companies and projects should be encouraged, in part to boost regional security, Johnston said. Coalition leader Tony Abbott told business and government leaders in Beijing last month that Chinese investment in Australia “is complicated” by the prevalence of state-owned enterprises in China.

China’s Behavior

“There’s a bit of insurance in having Chinese investment in the country,” Johnston said. “If they’ve got some commitment to us -- skin in the game is the common parlance -- then I think they are more prone to conduct themselves reasonably.”

A Newspoll survey published Aug. 7 showed support for Gillard’s Labor government rose to the highest level in six months, though the ruling party still trailed the opposition by 12 points. Labor’s primary vote increased five points to 33 percent from two weeks ago, while support for the opposition dropped one point to 45 percent, according to the Newspoll survey, which was published in the Australian newspaper.

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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