Pacific islands: a new arena of rivalry between China and the US
Beijing is making its presence felt in a region that the US navy considers strategically vital
Kathrin Hille in Honiara, Solomon Islands
The three dozen men and women sitting under huge Poinciana trees listen intently to Joyce Konofilia. A candidate in last week’s general election in the Solomon Islands, she was campaigning in a squalid settlement on a hillside above the capital city of Honiara where few residents have access to electricity and even fewer have jobs.
But when Ms Konofilia, an Australia-educated tourism consultant, had finished her stump speech, the first question from her audience was about foreign policy. A local elder rose and asked: “Do you support switching diplomatic relations from Taiwan to China?”
The Solomons, an archipelago of 630,000 people north-east of Australia grappling with poverty, corruption and occasional ethnic strife, is being hit by the full force of a rising China which claims Taiwan as part of its territory and over which it has mounted a diplomatic campaign to isolate Taipei.
While Chinese immigrants have dominated the local retail sector since the first arrivals in the 19th century, their community has swelled to more than 5,000 people over the past few years and threatens to establish a dominant position in the local economy. Chinese state-owned enterprises are building infrastructure projects, partly with Chinese loans, and bring in Chinese workers instead of offering badly-needed jobs to locals.
Similar forces are at play across the entire group of Pacific island nations as a new great power competition ignites more than 70 years after Japan and the US clashed in the second world war.
The region’s vast maritime expanses have long been controlled by the US Navy, whose base in Guam is central to its ability to project power in the western Pacific. China, however, is now making its presence felt. Beijing is attracting countries with promises to boost their development, but which might also enrich local politicians and raise fears of new colonial-style domination. In western capitals, China’s Pacific push has raised concerns that Beijing has military designs on the region.
Although China is challenging western power in other parts of the world, the calculations are different in the western Pacific, which contains economically weak countries with tiny islands and small populations that boast large maritime territories. If relatively small investments allow Beijing to gain influence over a number of governments in the region, China could then access or even control vast waters of vital strategic importance to the US.
“We are seeing everything from small-scale economic engagement to full elite capture. What is their aim? In the Pacific, there is nothing really economically worth a candle for China,” says Euan Graham, executive director of the Asia department of La Trobe University in Melbourne. “This is a pre-conflict type of shadow game, a geopolitical non-war version of island-hopping. The Pacific has become strategic again for the first time since World War II.”
The tribal chief Leliana Firisua says 'it’s a competition between third countries again, between China and the US, and China’s influence is being felt. The fallout has started affecting the region' © Kathrin Hille/FT
It is an uncomfortable reality for Solomon islanders to find themselves again on the frontline of clashing great powers. It was in Guadalcanal that the US started its main counteroffensive against Japan in the second world war. The seabed of Ironbottom Sound, the strait north of the island, is littered with the wrecks of warships.
“Once again things are starting to resemble what happened a long time ago,” says Leliana Firisua, a tribal chief and influential political figure. “It was not our war, but they came to Guadalcanal and we became victims. Now it’s a competition between third countries again, between China and the US, and China’s influence is being felt. The fallout has started affecting the region.”
The most immediate concern for Washington is Chinese attempts at gaining influence in Palau, the Federated States of Micronesia (FMS) and the Marshall Islands. These microstates have so-called compacts of free association (Cofa) with the US — agreements that give them subsidies and visa-free US residence for their citizens in exchange for the right to base its troops on their territory and block other countries from doing so.
In the Marshall Islands, Cary Yan, a Chinese investor, has leased large tracts of land on Rongelap, one of the atolls worst affected by US nuclear bomb tests. Mr Yan proposes to create a special economic zone which his company says would issue Marshall Islands passports to residents on its own. While he has not built anything yet, he has sold the idea to potential investors in China as a way to gain US residence rights.
The project had unexpected political consequences last year when supporters launched a no-confidence vote against president Hilda Heine hoping to replace her with someone more China-friendly. She narrowly survived the vote.
The Solomons is an archipelago of 630,000 people north-east of Australia grappling with poverty, corruption and occasional ethnic strife, as well as a rising China
In Chuuk, one of the FMS states, local politicians who have land dealings with Chinese investors are pushing for independence — a move which could collapse the country’s association with the US and present an opportunity for Chinese military interests.
In Palau, parliamentary speaker Sabino Anastacio, who is involved in a hotel project with Chinese partners, has become an advocate of switching diplomatic ties from Taiwan to China.
As well as building these relationships, China’s oceanographic research vessels have frequently criss-crossed the waters around these island states and close to Guam, where the US navy houses submarines that patrol the western Pacific. They map the seabed, observe marine life and climate patterns, and plant buoys and sensors that record how sound travels under water in different locations.
“The primary driver is seabed mineral exploration, but there are also clear military uses,” says Ryan Martinson, a China expert at the US Naval War College. “The area these vessels’ activity is concentrated in is where possible submarine warfare between the US and China would take place.”
The US Navy's base in Guam is central to its ability to project power in the western Pacific © Getty
China’s People’s Liberation Army has been building so-called anti-access and area denial (A2AD) capabilities that aim at keeping the US military out of a conflict in waters that it considers its “core interests”, especially Taiwan and the South China Sea.
“They are extending A2AD faster now,” says Alex Neill, a China expert at the International Institute for Strategic Studies. “China needs to develop its ability of navigating those waters to make their seaborne nuclear deterrent work.”
The US is starting to take notice. Washington agreed with Australia in January to build a joint military base on Manus Island in Papua New Guinea, the South Pacific country with the largest Chinese presence and recipient of massive aid from Beijing. The US is also ramping up funding to the Cofa states and has called on leaders not to switch diplomatic recognition from Taiwan to China.
However, few countries want to be caught in a geopolitical contest. “Pacific island countries don’t want to be in a situation where they have to choose sides, and even Australia would still like to think it can work with China,” says James Batley, former Australian High Commissioner to the Solomons.
Although Beijing’s total assistance to the region accounts for only 4 per cent of its global aid programme, the Chinese government uses aid strategically: it focuses on building infrastructure, and the average size of its projects is much larger than that of other donors, according to the Lowy Institute.
Voters return to their home province of Malaita from Honiara after casting their ballots in the Solomon Islands election © Kathrin Hille/FT
After a military coup in Fiji in 2006, China broke ranks with other regional powers who wanted to isolate the military government. Not only did it back the new rulers, it increased aid from $1m to $161m within two years. Fiji has since promoted regional initiatives that seek to sideline the Pacific Island Forum, a regional group that includes Australia and New Zealand — both US allies who have played a traditional role in the region.
Australia is also worried about Chinese financing of deep water ports such as Port Vila in Vanuatu and the possibility that it might seek to use such facilities as a naval base. “It is a settled view within the Australian government that China has strategic designs on such ports,” says Mr Graham. “Even if there’s only a 10 per cent risk of China putting up a base around here, it’s worth responding because the consequences would be so dramatic for Australia — we face chokepoints in Vanuatu, Fiji and the Solomons for shipping lines directly across the Pacific to America.”
The Solomon Islands government, meanwhile, caused shockwaves in Canberra in 2016 when it decided to replace an Australian-backed vendor chosen in an open tender for a subsea cable linking it to Sydney with Huawei, the Chinese technology group several western governments see as a security threat. Canberra responded by building the undersea cable for the Solomon Islands itself and paying two-thirds of the cost.
But the Chinese company is not giving up: Huawei is now offering to link up more distant parts of the country through a cable from Vanuatu. Australia say it does not object, but cautions such a project could push the country into a dangerous debt trap if financed through Chinese commercial loans.
In Tonga, Chinese money has left the country dependent on Beijing. Under a scheme currently contested in Tongan courts, China Electronic Systems Engineering (Cesec), a company linked to the PLA, paid Tongasat, a company controlled by Pilolevu, Tonga’s Princess Royal, US$50m in 2008 for parking a satellite in the Polynesian kingdom’s skies. The bulk of the funds, half of which should have gone into the national budget, went to the company, according to Tongan court documents.
Joyce Konofilia, a candidate in the Solomon Islands election, remains full of admiration for the Chinese Communist party’s record in lifting the Chinese people out of poverty © Kathrin Hille/FT
Tonga borrowed $114m between 2008 and 2010 from Beijing. Its debt to China is now equivalent to 43 per cent of the country’s gross domestic product. The royal family has subsequently launched an investigation into Akilisi Pohiva, the prime minister and main critic of the princess, in what he says is an attempt to replace him with a more China-friendly candidate.
Anne-Marie Brady, an expert on China in the region, says Beijing’s engagement in Tonga is highly strategic. “These South Pacific nations are crucial in military terms: China’s Beidou system needs their satellite slots for missile guidance and command and control,” she argues.
In Honiara, Tonga’s example is seen as a cautionary tale. “We see what happened there, and in Sri Lanka and the Maldives — the huge loans, the debt trap,” says Mr Firisua. “We need to be careful because we are very small, and we could lose our sovereignty.”
But China’s pull is strong. Money from Beijing played a significant role in the country’s election — which was held last week but which could take until the end of the month before a government is formed. According to a member of parliament and a Chinese executive in Honiara, the state-owned China Civil Engineering Construction Corporation is one of Beijing’s conduits for financing local politicians. Manasseh Sogavare, a former prime minister, received funds from CCECC for his campaign to be re-elected to his parliamentary seat, the two people said. Mr Sogavare did not respond to a request for comment.
Back from a two-week visit to China paid by Beijing last year, Ms Konofilia, the candidate, remains full of admiration for the Communist party’s record in lifting the Chinese people out of poverty. “They are empowering their people,” she says, adding that she hopes to get Beijing’s support in transforming the Solomons.
But among the islanders, anger is building over the growing numbers of Chinese immigrants and their increasing economic power.
Despite Ms Konofilia’s admiration for Beijing, she has vowed to exclude Chinese investors from a broader range of industries. “We don’t want to have everybody interfere here any longer,” she says. “We want to live our lives. Just leave us be!”
Ethnic tension: fears Chinese migration could prompt new unrest
Wu Yunmin has heard of the “tensions”. But tending to the stream of customers who browse solar-powered white goods and lamps in his uncle’s shop in Honiara, the 19-year-old Chinese migrant is too busy to think much about events 13 years ago.
In 2006, Solomon islanders turned against the growing community of migrants from China in riots that ended with most of Honiara’s Chinatown going up in flames.
Now, tension is building again as the Solomons have seen another new wave of Chinese immigration. Many observers warn of the risk of renewed unrest.
Most of the recent arrivals are young people from the coastal province of Fujian eyeing a quick fortune selling cheap clothing and household goods.
“Maybe I can soon open my own shop — it’s great business here because the locals don’t make anything themselves, you can sell them everything,” says Mr Wu, who arrived two years ago. “I can save up most of my salary because there is no entertainment here.”
While many of the previous generations of Chinese immigrants are well integrated in local society, the newcomers have little social contact with islanders and often look down on them.
According to a government report published last month, many Chinese-owned businesses pay local employees less than the legal minimum wage and refuse to pay social security contributions. Moreover, Chinese entrepreneurs are increasingly moving into the local population’s last economic niches — including betel nut farming and the cargo and bus transport business. There are even recent migrants running fish and chips shops.
“Honiara is as Wild West as it gets,” says Graeme Smith, a China expert at Australia National University. “Ironically it might get better if China had diplomatic representation as its embassy might try to control its people a bit.”
China has become the country’s largest trading partner by far — unusual for a country that still retains diplomatic ties with Taiwan. China is absorbing the archipelago’s exports of timber, minerals, fish and palm oil and providing the Solomons with everything from cooking pots to roofing iron to plastic toys.
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