This content is not available in your region

China emerges as second-largest aid donor in South Pacific - think tank

Access to the comments Comments
By Reuters

SYDNEY (Reuters) – China has emerged as the second-largest aid donor in the South Pacific, figures published on Thursday by a think tank show, illustrating its growing influence in a region traditionally dominated by Australia and New Zealand.

China’s $1.3 billon (£1 billion) worth of donations and concessionary loans since 2011 trails Australia’s $6.6 billion, figures compiled by the Australia-funded Lowy Institute show, but it is more than New Zealand’s $1.2 billion.

Spending by China, criticised by many of its neighbours for island building in the South China Sea, is almost 9 percent of total aid donations in the South Pacific. If pledged aid is included, China’s promises total $5.9 billion, or nearly a third of all aid pledged to the region’s 14 countries by 62 donors.

“There is definitely an element of briefcase diplomacy in the Pacific,” the Lowy Institute’s Pacific Islands programme director, Jonathan Pryke, one of two lead researchers, told Reuters by phone from Samoa.

“They are engaged in buying support,” he said, adding that China’s sway was not “as overwhelming as you might get the sense from the narrative that’s been played out this year and last”.

The Lowy analysis lands as Australia-China relations sour. Australia has moved to both check Chinese influence domestically and step up Pacific engagement, along with New Zealand and the United States.

Australia recently outbid China to lay an internet cable to Papua New Guinea and the Solomon Islands, which the research ranks as the two largest aid recipients in the region, while also expressing concern at the scale of China’s lending.

A Reuters’ analysis of the financial books of 11 South Pacific island nations shows China is now the region’s biggest bilateral lender, with loans jumping from almost zero to over $1.3 billion currently outstanding in a decade.

GRAPHIC – China’s lending in the Pacific:

The Lowy numbers, which do not include New Zealand contributions since March 2017, also show China jostling with Taiwan to use aid money as a means of cultivating diplomatic ties in region home to a third of Taiwan’s allies.

On a per capita basis, Beijing, which views self-ruled Taiwan as a breakaway province of “one China”, invested $108 in seven countries supportive of that view. Taiwan spent $120 per capita in the six countries where it has formal diplomatic ties.

Representatives of China and Taiwan in Australia did not immediately respond to Reuters’ requests for comment, nor did a spokeswoman for New Zealand’s foreign minister or the foreign ministries in Beijing and Taipei.

Australian Prime Minister Malcolm Turnbull, in a speech on Tuesday attended by China’s ambassador, struck a conciliatory tone, saying China will “of course” seek and gain a greater role in world affairs. China’s foreign ministry said it noted and commended “these positive remarks”.

(Reporting by Tom Westbrook; Editing by Nick Macfie)