Tiny Nauru in talks with Australia, China amid Pacific influence tussle

By Kirsty Needham

The Pacific island nation of Nauru is in talks with Australia on a migration and economic deal, a Nauru official said on Wednesday, as the world's third-smallest country also weighs offers from China.

Beijing trumpeted Nauru's move in January to switch diplomatic ties to China from Taiwan, amid a tussle for influence in the Pacific Islands, where the Asian giant's growing police presence has raised concern in Australia.

China pledged A$15 million in direct budget support to Nauru this year, although the money had not been received by October, a Nauru government budget update showed.

Australia's anxiety about China's security ambitions in the Pacific Islands grew after Beijing fired an intercontinental ballistic missile with a dummy warhead into the Pacific Ocean in September.

A Nauru government official confirmed to Reuters there were talks between President David Adeang and Australia on a migration deal.

On Wednesday, Australia's Sydney Morning Herald newspaper reported that Canberra wanted a pact with Nauru that prevented China from gaining a security foothold.

"The talks are still underway," said the Nauru government spokeswoman, declining to give further details.

Australia's department of foreign affairs and trade did not respond to a request for comment, and other Australian officials declined to comment.

The speaker of Nauru's parliament, Marcus Stephen, met China's top political adviser, Wang Huning, in Beijing on Tuesday, state news agency Xinhua said.

Adeang travelled to Australia to meet Prime Minister Anthony Albanese in May and June, after a March visit to Beijing to meet President Xi Jinping.

Australia's Regional Processing Centre for asylum seekers, hosted in Nauru, accounted for three-quarters of government revenue collection this year, and is forecast to contribute A$209 million ($135 million) in 2024-25, the budget update showed.

Australia has also pledged aid of A$46 million ($30 million) this year.

In the 1970s Nauru was among the world's richest nations per capita because of phosphate mining, despite a small land area of 21 sq km (8.11 sq miles). The nation of 12,000 people fell into debt two decades later.

Ministers from Nauru visited China last month to discuss phosphate exports, and financial arrangements with the Bank of China, Nauru statements show.