China formally established its first global military base in Djibouti in July a year ago, 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.
Vanuatu, a former British-French colony previously known as the New Hebrides, housed a large USA military base during World War Two aimed at helping stem the advance of the Japanese army through the Pacific towards Australia, 2,000 km (1,200 miles) to the west.
Rory Medcalf, head of the National Security College at the Australian National University, said in a report for the Lowy Institute think tank in Sydney: "Any future naval or air base in Vanuatu would give China a foothold for operations to coerce Australia, outflank the United States and its base on USA territory at Guam, and collect intelligence in a regional security crisis".
Commenting on the issue, a spokesman for the Chinese ambassador to Vanuatu said the reports were "ridiculous", while Chinese Foreign Ministry dubbed them as "fake news".
Some analysts believe that Australia, France and New Zealand are likely to re-double diplomatic efforts in the region to ensure China's foothold is contained.More news: If I come out of retirement, it'll be for a UFC fight
Australian Prime Minister Malcolm Turnbull told reporters in Brisbane: "We would view with great concern the establishment of any foreign military bases in those Pacific island countries and neighbours of ours".
Foreign Minister Julie Bishop visited Vanuatu with Prince Charles on Saturday in a diplomatic tour that Fairfax Media has been told was aimed at demonstrating the merits of the Commonwealth's commitment to a free and open system of worldwide rules.
China is reported to be engaging in discussions with Vanuatu about constructing a military base on the island nation, a move that has triggered concern of growing Chinese presence in the South Pacific region.
Ms Ardern on Tuesday couldn't confirm the reports, but told reporters "we take a strong position in the Pacific against militarisation".
"There were a number of players doing certain things in the Pacific that are not good for the peace and security, long-term, of the Pacific, or for the growth of democracy itself", Peters said. "We are not interested in militarisation, we are just not interested in any sort of military base in our country".More news: Tour bus headed to the Masters golf tournament flips on Georgia highway
National leader Simon Bridges said Vanuatu had to think through any proposals, and work out what they got out of it, before making a decision.
Academic director at Australian National University's National Security College Matthew Sussex said that while it wasn't surprising that China would have an interest in Vanuatu, the threat shouldn't be overstated.
Currently, China has only one military base in a foreign country, located in Djibouti on the Horn of Africa, but has been increasing its presence in the Pacific, especially in the South China Sea.
Chinese money has already helped finance a new wharf on the north island of Espiritu Santo, alongside an upgrade to the global airport.
The Lowy Institute said China had contributed more than $2.3 billion in aid to the Pacific since 2006.More news: Alternate jurors selected for Cosby's retrial
"It would allow them to have some forces positioned behind the USA base in Guam and would allow China to monitor and patrol the South Pacific Ocean".