China’s commitment to the Pacific may be overstated

Recipient countries have received less than a fifth of promised aid from Beijing

Jamie Smyth in Sydney

China last year committed $4bn towards 41 projects in the Pacific, including the rollout of a national broadband network in Papua New Guinea © Marc Anderson/Alamy

China has established itself as the second biggest aid donor in the South Pacific, committing more than $6bn to projects over the past seven years, as Beijing seeks to expand its influence in the region.

But new figures show that recipient countries have received less than a fifth of the promised aid from Beijing, which has mainly been directed towards flagship projects, such as road building or industrial facilities. Such infrastructure projects are often designed to enhance China’s status and facilitate commerce but can take time to deliver and are often in the form of concessional loans that must be paid back, according to a report by the Lowy Institute think-tank.

Australia remains the largest aid donor in the South Pacific committing $6.72bn between 2011 and 2018 and spending $6.58bn. New Zealand, the US and Japan are the third, fourth and fifth largest donors respectively.

Taiwan, which is locked in a battle for political influence with China in the region, has spent $225m on 535 projects since 2011.

“China has committed a lot but it remains to be seen if that is all spent. Their aid is massively concentrated on around 200 projects,” said Jonathan Pryke, a Lowy analyst.

He said the prevailing narrative suggesting Chinese aid dominance in the Pacific Islands was overstated, with China only investing 8 per cent of the total $14.51bn aid spending. But he said Chinese influence had grown over the past seven years as total aid to the region fell by about a fifth over the period, mainly due to a pullback by the US, EU and France.

Western powers are concerned about China’s growing influence in the Pacific, where Beijing is funnelling more aid as it builds economic and political ties with island nations. Last year China committed a record $4bn towards 41 projects, including the rollout of a national broadband network in Papua New Guinea, the 360m-long Luganville wharf in Vanuatu — the longest in the South Pacific — and a $5.3m donation of military vehicles to the PNG defence forces.

In January, Concetta Fierravanti-Wells, Australia’s development minister, accused Beijing of “duchessing” politicians in the Pacific and funding “white elephants”, including “roads to nowhere”. The IMF has also warned China’s disbursement of concessional loans to Pacific nations could sow the seeds of a debt crisis.

Mr Pryke said Vanuatu, Samoa, Tonga and Fiji had heeded these warnings and had not taken aid in the form of loans since 2016. He said there was a greater appreciation of the debt issue following a recent failure by Tonga to persuade China to grant debt relief over infrastructure loans.

PNG continues to accept loans from Beijing and is by far the biggest aid recipient in the region, attracting total commitments of $5bn but actually receiving and spending only $402m.

Some western powers are increasing their aid to the region to counter China’s influence, with New Zealand raising its aid budget by a third over four years as part of its “Pacific Reset” strategy. The Asian Development Bank and World Bank are aiming to triple their investment in the region over the next five years.

Australia is boosting its aid to the Pacific to record levels, despite steep cuts to its aid budget over recent years. Canberra’s aid to the region is much broader than China’s programme. It funds more than 5,000 projects spanning health, education, security and infrastructure.

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