Australian Prime Minister Malcolm Turnbull said Australia would view "with great concern" any foreign military bases being built in the South Pacific, following reports Beijing was in talks with Vanuatu to host Chinese forces.
Turnbull said in a press conference Tuesday the High Commissioner of Vanuatu had assured the Australian government no Chinese requests for a military presence had been made.
"The maintenance of peace and stability in the Pacific is of utmost importance to us," he told reporters.
The small island nation of about 282,000 people sits in the South Pacific, close to Australia, New Zealand and Papua New Guinea. Any Chinese military presence could see warships based less than 2,500 kilometers (1,553 miles) from Australia's coast.
It has long been a large recipient of Australian government aid, but in recent years has received hundreds of millions of dollars in loans and grants from the Chinese government.
The suggestion that China was looking to establish a base in the South Pacific nation, as first reported by Fairfax Media Tuesday, was met with denials from both Vanuatu and Australian government officials.
Australia's Foreign Minister Julie Bishop also tried to quell fears of an increased Chinese military presence in a region which has traditionally been under Canberra's sphere of influence.
"I remain confident that Australia is Vanuatu's strategic partner of choice," Bishop told the Australian Broadcasting Corporation (ABC) on Tuesday.
But Australian broadcaster, Nine News, separately quoted a senior defense official on Tuesday claiming the Chinese government had "certainly expressed its interest" in a greater military presence in Vanuatu.
The Vanuatu government denied the reports on Tuesday, slamming suggestions there were any talks between the two countries along those lines.
"We are a non-aligned country. We are not interested in militarization, we are just not interested in any sort of military base in our country," Foreign Minister Ralph Regenvanu told ABC.
When asked at his daily press briefing, China's foreign ministry spokesman Geng Shuang said the reports were "fake news."
CNN tried to contact both the Australian Defense Ministry and the Vanuatu Foreign Ministry, but did not get an immediate response.
Reacting to the report Tuesday, New Zealand Prime Minister Jacinda Ardern said it was ultimately a matter for Vanuatu and China to decide on, according to Radio New Zealand.
"But I'm very openly expressing now, and would do either privately or publicly, that we take a strong position in the Pacific against militarization," she said.
Militarization of Vanuatu could worry US
Any moves towards a military presence on Vanuatu would have strategic implications of not only Australia and New Zealand, but also the United States, Euan Graham, director of the International Security Program at Sydney's Lowy Institute, said.
"People who look across the Pacific will look from a geostrategic point of view and obviously take notice of this very bold statement of ambition, if it is true, that the Chinese navy is now seeking to acquire some sort of presence," he said.
Graham said while he found suggestions of Vanuatu agreeing to a permanent military base unlikely, a dual-use civilian military facility which could give occasional access to People's Liberation Army vessels could be possible.
China has diplomatic relations with several Pacific nations and is a major sponsor of development and aid projects in Vanuatu, Tonga, Papua New Guinea and Fiji.
Between 2000 and 2012, China offered about 30 major projects to Pacific island countries, including the construction of government official buildings and infrastructure such as highways, bridges and hydropower stations, according to a paper by Professor Yu Chang Sen, of the National Center of Oceania Studies, at Guangzhou's Sun Yat-sen University.
In Vanuatu specifically, China has provided $243 million dollars in loans and grants from 2006 to June 2016, according to figures from Sydney's Lowy Institute, a figure that while large, lags behind Australia which provided $400 million during the same ten year period.
Chinese financial aid in Vanuatu has so far focused on key infrastructure development, including Luganville International Wharf, on the island of Espiritu Santo, a large 300-meter docking facility that can accommodate two mid-sized freighters, or a single large cruise ship at any one time.
The wharf, constructed by the Shanghai Construction Group, was described by China's Ambassador to Vanuatu as "a new milestone of China-Vanuatu cooperation in the field of infrastructure development."
China's military ambitions
In recent years Beijing has been stretching its maritime muscles outside of East Asia.
China formally established its first international military base in Djibouti in July last year, in the strategically important Horn of Africa, this was followed several months later by the country's controversial acquisition of the Hambantota port in Sri Lanka.
Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Sydney, described the Hambantota deal -- which saw Sri Lanka grant China a 99-year lease on the port to service some of the billions in debt it owes to Beijing -- as part of a "bigger picture."
"The more you invest in the Belt and Road initiative, the more the Chinese are in a position to force your country to align politically in terms of policy," Davis told CNN last year, referring to China's ambitious One Belt One Road (OBOR) international development strategy.
"So you become dependent on their investment and their largesse, and you're less likely to be critical of them and you're more likely to accommodate their interests strategically."
Under President Xi Jinping those strategic interests have shifted, with the Chinese navy in particular undergoing a significant transformation, in line with China's own rise as a global superpower.
Whereas previously China's navy was largely defensive and confined to the country's immediate coastal waters, today it boasts significant "blue-water" capabilities, meaning it could operate anywhere in defense of China's interests.