Papua New Guinea has found itself caught in the crosshairs of the China-Australia rivalry, as both nations vie for influence in the Pacific.

China issued a warning to the island nation after its defence pact with Australia failed to sail through.

The agreement, called the Pukpuk Treaty, is widely seen in Australia as a counter to Beijing’s growing influence in the Pacific.

New defence pact

The deal will allow the nations’ citizens to serve in either nation’s military.

Australia would offer Australian citizenship as an incentive for Papua New Guineans to enlist in the Australian military.

The Chinese embassy in Papua New Guinea on Thursday said that signing such a treaty could restrict or prevent the Pacific nation from cooperating with another country.

“However, such a treaty should not be exclusive in nature, nor should it restrict or prevents a sovereign country from cooperating with a third party for any reason. It should also refrain from targeting any third party or undermining its legitimate rights and interests," the embassy said in a Facebook post.

“We hope that the PNG side will continue to uphold independence and self-reliance, properly handle issues bearing on its sovereignty and long-term interests,” it added.

The warning came a day after the agreement faced a roadblock in Papua New Guinea’s national cabinet.

The cabinet meeting had lacked enough members to reach the quorum required to endorse the treaty.

Instead, both Australia and Papua New Guinea signed a communique supporting the treaty on Wednesday.

Both countries insisted that they would go ahead at a later date.

“We will go through our respective cabinet processes and expect to finalise the signing of the treaty, the words of which have been agreed, in coming weeks,” Albanese said at a press conference in Port Moresby on Wednesday.

The latest incident marks the growing rivalry between Australia and China in the Pacific islands.

The U.S. and Australia have been racing to limit China's security ambitions in the Pacific ever since the Solomon Islands' then-leader, Manasseh Sogavare, signed a security deal with Beijing in 2022.

The U.S. and its allies are particularly concerned by China’s growing sway in security through police training in Fiji, Kiribati, Samoa, Solomon Islands and Vanuatu.