SYDNEY - New Zealand warned in a defence report on Friday that China's rising influence in the South Pacific could undermine regional stability, in comments likely to stoke bilateral tension.
New Zealand and Australia have traditionally held the most influence in the South Pacific, but the NZ government said in the report it was now losing its sway over small island nations to China.
"New Zealand's national security remains directly tied to the stability of the Pacific. As Pacific Island countries develop ... traditional partners such as New Zealand and Australia will be challenged to maintain influence," the government report read.
"China holds views on human rights and freedom of information that stand in contrast to those that prevail in New Zealand."
New Zealand has announced it would increase foreign aid by nearly a third, in part to counter China's rising influence in the South Pacific.
"We live in turbulent times, the world is changing and there has been a re-emergence of great power competition," New Zealand defence minister Ron Mark told reporters in Wellington.
China has denied that it is using its aid to exert influence in a region blessed with significant natural resources.
But, in an interview with Fairfax Media published on Friday, Australia's outgoing defence chief Mark Binskin cited "the influence of some nations starting to come down into the southwest Pacific" as among his concerns.