In a move experts say could give Beijing even greater influence over Australia's nearest neighbour, Papua New Guinea's Prime Minister James Marape has reached out to China to help refinance its 27 billion kina ($11.8 billion) national debt.
Mr Marape made the request yesterday in a meeting with China's ambassador to PNG Xue Bing in Port Moresby, according to a statement issued on Tuesday afternoon by his office.
But this afternoon, the Prime Minister appeared to backtrack on the Government's earlier claims and said the statement was issued to media without his knowledge.
Mr Marape maintained that PNG is seeking assistance with its debt levels from China among a string of other partners such as the World Bank and "some other possible non-traditional partners".
"I have put [a] stop to more borrowings and loans until we are satisfied that the project cost-benefit analysis establishes [a] return on the loans we might secure," he said.
The appeal comes almost two weeks after the leader's first official visit to Canberra since being voted in as the Pacific nation's head of state in May.
In meetings with Prime Minister Scott Morrison, Mr Marape dismissed concerns about the risks associated with Chinese investment, calling it "inconsequential and irrelevant" whether foreign investment came from countries such as China.
Mr Marape also said he wanted to move away from an "aid-donor" relationship with Australia, which had traditionally been PNG's largest aid donor.
But as ties between China and PNG strengthen, the Morrison Government has tried to counter China's sway in the Pacific and flagged concerns smaller nations could become shackled to the political interests of the super power.
There are concerns PNG could face a similar "debt trap" situation to Sri Lanka, which was forced to sign over a 99-year lease on the Port of Hambantota when it was unable to repay a Chinese loan.
The Lowy Institute's research fellow Shane McLeod said it was likely PNG's new Government was looking at ways to get on top of financial challenges, with its debt sitting at 32.8 per cent of the GDP.
He said if China was to restructure all of PNG's debt it "would be a significant change to the relationship".
"If it was to take responsibility for all of that debt, you'd imagine there would need to be some arrangements to give China some security," Mr McLeod told Pacific Beat.
"The interesting dimension is whether China would want to be the sole provider of debt to PNG's Government and what that would mean politically for China's position in the region," he said.
A statement issued by China's Ministry of Foreign Affairs said China's relationships with Pacific island countries were "pursued for the greater good and shared interests".
Mr Marape also asked China to enter into free trade agreements with Pacific island countries, particularly PNG.
The Prime Minister's department said the Chinese ambassador raised concerns about next week's Pacific Islands Forum being held in Tuvalu, which has diplomatic relations with Taiwan.
Mr Xue reportedly urged PNG to support China to be allowed to speak.
