The Morrison government has faced criticism from Labor and aid groups that Australia has neglected parts of south-east Asia to pay for itsPacific "step-up",which is countering Chinese influence closer to home.
Multiple senior sources from the government and the Department of Foreign Affairs and Trade have confirmed a south-east Asian package is being finalised and will cost hundreds of millions of dollars over the next four years.
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The Morrison government is still considering the package,with the final decision on cost and scope to be made in the coming months.
The sources said the package would focus on countries along the 4900-kilometre Mekong River,including Cambodia,Laos and Vietnam.
Beijing has been steadily growing its influence over smaller countries in the region including Cambodia and Laos,while Vietnam has been pushing back against China's assertiveness,such as its expansion in the South China Sea.
A US government-funded report by research company Eyes on Earth earlier this year found Chinese dams were holding back large amounts of water in the Mekong,worsening a severe drought and reigniting warnings that millions of livelihoods in the downstream countries could be destroyed. China's Foreign Ministry dismissed the findings as"groundless".