Australia’s nearest neighbour could be about to sell its power grid to China in a move that would hand Beijing unprecedented influence in the South Pacific and a presence right on our doorstep.
Management from Papua New Guinea’s state-owned electricity provider PNG Power Limited have travelled to China and are open to investment.
WATCH THE VIDEO ABOVE: Fears grow as Aussie neighbour could sell its power grid to China.
Know the news with the 7NEWS app: Download today 
Speaking exclusively to 7NEWS National Business Editor Amelia Brace, PNG Power director Marlen Brunskill said that China is “very easy to deal with” and admitted he is open to Beijing filling a void left by Canberra.
“When China fronts up, the US and Australia start rushing – otherwise it’s very hard to get their attention,” he said.
He described Australia as “reactive”.
Opposition foreign spokesperson Simon Birmingham said the reports were “deeply concerning”.
“They certainly signify a potential failure on behalf of the Albanese government and they require urgent action,” he said.
Strategically, PNG is critically important to Australia as China seeks to assert influence in the South Pacific.
Buying the energy asset would give it control over all generation, transmission, distribution and retail power assets in the country.
“It presents as a significant prize for China to expand its influence across the Pacific,” the Lowy Institute’s Pacific Islands program director Mihai Sora told 7NEWS.
PNG has one of the highest rates of power outages in the world but the world’s highest power prices, paying twice as much as Australians.
PNG’s State Owned Enterprise Minister William Duma issued a parliamentary plea to address the prices less than a year ago.
“PNG Power has reached a critical point where all financial indications show that this company is in danger of insolvency,” he said.
Australia has made contributions to the PNG power network as part of a $500 million partnership with our allies.
Foreign Minister Penny Wong is travelling to Fiji for the Pacific Islands Forum and will no doubt face questions over China’s ambitions.