By Kirsty Needham
SYDNEY (Reuters) -East Timor has not discussed military cooperation with China in its upgrade of diplomatic ties, President Jose Ramos-Horta said, adding Australia and Indonesia can «sleep at peace» because the island nation won't be a security concern to its neighbours.
China's increasing assertiveness in efforts to form security ties with developing countries in close proximity to Australia have raised alarm bells in Canberra, and a recent shakeup of Australia's defence has refocused on protecting its northern approaches.
A Comprehensive Strategic Framework signed by East Timor during a meeting between Prime Minister Xanana Gusmao and China's President Xi Jinping in China last week covered development cooperation in agriculture and infrastructure, the Nobel laureate said in a telephone interview with Reuters.
The agreement also provided scope for funding from China including government and commercial loans to East Timor, he said.
«Right now we don't have a single loan from China,» he said. «In the future we might request a loan from China… We will not accept any unmanageable, unsustainable loan with too high interest payment.»
Some Australian politicians expressed concern after China's state media reported on Saturday that Beijing's agreement with East Timor, around 700km (450 miles) north-west of Australia, also covered military exchanges.
China struck a security pact with Solomon Islands, 2,000km (1,200 miles) to Australia's north-east last year, heightening Canberra's wariness about Beijing's naval ambitions.
«It was never discussed in terms of military cooperation, never discussed, and the Chinese side also never raised this issue,» Ramos-Horta said.
East Timor, also known as Timor Leste, aims
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