Australia and New Zealand said on Tuesday they were closely monitoring developments while downplaying a report that China wants to establish a permanent military base in the Pacific nation of Vanuatu. China's defence ministry said the Fairfax report "completely did not accord with the facts" while a foreign ministry spokesman said the report was "fake news".
In rejecting the report, Mr Regenvanu said he was "not very happy about the standard of reporting in the Australian media".
"We have very good relationships with Vanuatu and I remain confident Australia is Vanuatu's strategic partner of choice".
Chinese money has already helped finance a new wharf on the north island of Espiritu Santo, alongside an upgrade to the global airport, it was reported.
While China has been investing in infrastructure around the world, to date it has only established one overseas military base - in Djibouti on the Horn of Africa.
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While far from key shipping lanes and not as important as Indian Ocean ports, Vanuatu would put China close to the coast of Australia, a major USA ally, and give it a presence nearer the US base of Guam beyond the Asian island chains that hem in Beijing.
If the plan materializes, it will also be a threat to the U.S. as it would shake-up the country's dominance in the Pacific. "We are not interested in militarisation, we are just not interested in any sort of military base in our country", he said.
"No one in the Vanuatu government has ever talked about a Chinese military base in Vanuatu of any sort", he said.
Australia will give Vanuatu A$69.8 million ($54 million) in aid in 2017-18, and provides the nation "with the majority of its tourists, foreign direct investment and aid", according to the Australian government.
"But what I can say is we, of course, keep a watching eye on activity in the Pacific and that New Zealand is opposed to the militarisation of the Pacific generally". The statement came after a report suggested that Beijing was pushing the proposal, sparking concern in Australia and New Zealand.
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Australian Foreign Minister Julie Bishop on Tuesday said she had been assured by Vanuatu officials that there was no formal proposal from Beijing, but she stopped short of addressing whether there had been any unofficial talks. It set up its only overseas military base in Djibouti previous year.
Recent diplomatic rows have broken out between Australia and China over Beijing's aid programs in the Pacific.
"We must remember that Vanuatu is a sovereign nation and its foreign and defense relations are a matter for Vanuatu".
The head of the national security college at the Australian National University, Prof Rory Medcalf, said any foreign power establishing a foothold in the South Pacific would represent "a long-term failure of Australian policy".
The facility, which would be China's second overseas base, would not only signal a new stage in Beijing's growing military ambition, but also alter the delicate balance of power in the South Pacific.
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Cooper said with the USA focused on north Asia, Washington would expect Australia to stop the South Pacific from sliding too deeply into Beijing's hands.