Sydney (AFP)

Papua New Guinea backed off after announcing that it had asked Beijing to refinance all of its public debt, with his prime minister saying the information was "false" and had been released without his approval.

It was in a statement issued Tuesday by his cabinet that the head of government James Marape had announced to the surprise that he had asked Beijing for help to refinance a public debt of 27 billion kinas (7.1 billion), at a meeting in Port Moresby with the Chinese ambassador.

But Wednesday afternoon, the same cabinet issued a new statement saying it was "wrong" to say that Mr. Marape "was all about China" to solve the problem of Papua's debt.

He said that Papua had essentially discussed trade issues with China, while discussing the issue of debt with "non-traditional partners", which he did not name.

"We are discussing with many of our bilateral partners to obtain low-cost financial concessions to breathe better," said Marape in the statement.

"This includes our discussions with the World Bank, the Asian Development Bank and some other non-traditional partners."

Papua's public debt represents almost 33% of its GDP, and its repayment engulfs 15 of its annual budget.

Peter O'Neill, who came to power less than three months ago, said he wanted to "refinance bad and expensive loans contracted by the previous government" while assuring that he would not add an irresponsible burden on the Papuan economy.

Since becoming Prime Minister, Mr. Marape has declared war on endemic corruption in his country and has promised to rebalance his relations with his allies, as well as with the multinationals who exploit the vast mineral resources of Papua.

But asking China to refinance all of Papua's public debt is likely to irritate Australia and the United States, worried about Chinese expansionism in the Pacific.

The Chinese authorities have been steadily increasing their presence in the area with loans and infrastructure funding, prompting Canberra and Washington to launch their own charm offensive so as not to lose their traditional island allies.

China has often been accused of using its financial leverage to expand its influence and trap some vulnerable countries into unsustainable debt.

© 2019 AFP