Australia and PNG pledge closer ties as Canberra seeks to renew Pacific influence

SYDNEY, July 22 (Reuters) - Australia and Papua New Guinea said on Monday their leaders will meet annually in a bid to foster closer ties, which Canberra believes is important in its bid to counter China's quest for greater influence in the Pacific.

The pledge came after PNG Prime Minister James Marape, who came to power in May, met Australian Prime Minister Scott Morrison for the first time.

Morrison said bilateral meetings would be held annually in a bid to improve ties between the two close neighbours that have frayed in recent years.

"This is a broad and a deep relationship but, above all, it is a relationship of family and true friends," Morrison told reporters in Canberra.

Australia, which long enjoyed nearly unchecked influence in the Pacific, and its Western allies worry that it has edged closer to China in recent years as Beijing increased aid to the sparsely populated region and its vast resource-rich oceans.

China denies it is seeking a sphere of influence in the Pacific, saying its aid is intended to help with economic development.

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"Marape has said that he wants to diversify PNG's relationships, but this visit will comfort those who worried that Australia is no longer the partner of choice in the region," said Jonathan Pryke, director of the Pacific Islands programme at the Lowy Institute, a Sydney think tank.

PNG has turned increasingly to China for financing in recent years and China forged a particularly strong relationship with Marape's predecessor, Peter O'Neill.

O'Neill was the first Pacific leader to sign up to China's Belt and Road infrastructure-building programme. He met President Xi Jinping more than a dozen times during his eight years in office, stoking fears in Australia that its influence in PNG was waning.

Australia has offered Pacific countries up to A$3 billion ($2.11 billion) in cheap loans and grants in a bid to arrest its slide in influence, while Canberra has also increased its diplomatic presence in the region. ($1 = 1.4205 Australian dollars) (Reporting by Colin Packham Editing by Paul Tait)

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