China's financial largesse in the Pacific doesn't come for free

by Anna Fifield / 24 November, 2018
Chinese President Xi Jinping. Photo/Getty Images

Chinese President Xi Jinping. Photo/Getty Images

RelatedArticlesModule - China Pacific

Xi Jinping's recent efforts to extend China's influence in the South Pacific should be causing alarm bells to ring in New Zealand.

Chinese President Xi Jinping was early for the Asia-Pacific Economic Cooperation (Apec) November meeting in Papua New Guinea. He may be the leader of the world’s second-biggest economy and in the middle of a raging trade war with US President Donald Trump, but Xi had business in Port Moresby.

He had to open the Butuka Academy, a kindergarten-through-high-school project for 3000 students that is funded by China. He had to stop in on the Chinese table-tennis coaches training local players at the academy. He also had to open Independence Boulevard, the Chinese-funded, $17 million six-lane road that runs the kilometre between PNG’s parliament and the international convention centre where the Apec meeting was held. And yes, China financed the convention centre, too.

Xi was the first Chinese leader to visit PNG, the poorest member of Apec. Everywhere he went, he was given red-carpet treatment and greeted by cheering crowds. Huge portraits of him hung throughout the city. One wit quipped that the meeting should have been called “Xipec”.

It was a spectacular illustration of China’s efforts to extend its influence across the Pacific – and something that should be causing alarm bells to ring in New Zealand.

Xi is making this effort for both diplomatic and strategic reasons. On the diplomatic front, China has been ramping up efforts to flip the few remaining countries in the world that have diplomatic relations with Taiwan instead of supporting Beijing’s “One China” policy.

The leaders of Pacific Island states that are not members of Apec but have diplomatic relations with Beijing, including Fiji, Cook Islands, Samoa, Tonga and Vanuatu, travelled to PNG to have dinner with Xi while he was in the neighbourhood. Xi was no doubt trying to show to the six Pacific states that still recognise Taiwan, an island that China views as a breakaway province, what they’re missing out on.

China’s friends in the South Pacific are finding that cosying up to Beijing can pay big dividends. That’s where the strategic part of China’s expansion in the region comes in. It is trying to spread its influence through Asia, Europe, Africa and now the Pacific with its trillion-dollar Belt and Road Initiative (BRI). PNG is becoming the poster child in the region for this massive infrastructure plan.

A few months ago, PNG signed on to become part of the “Maritime Silk Road”, one component of the BRI. Beijing has already promised US$2.8 billion to help build the country’s first national road network. It has also pledged to help build a new court complex in Samoa and a huge government office building in Tonga.

Beijing is clearly vying with Australia and New Zealand for influence in the Pacific, and this is concerning Canberra, traditionally  the biggest donor in the region. Winston Peters has echoed those concerns, saying China is trying to fill a “vacuum” in the region.

The Chinese state apparatus has pushed back against such assertions, telling Australia and New Zealand that they’re too dependent on the US and not paying enough attention to their own backyard.

But governments from the Maldives to Malaysia, and from Sierra Leone to Sri Lanka, are beginning to realise that China’s largesse does not come without strings attached. In fact, it can very easily become a debt trap for poor nations. Take the case of Sri Lanka, which couldn’t pay back its loans and had to hand over an entire port on a century-long lease, giving China a strategic foothold right beside its rival, India.

New Zealand and Australia are right to fear a repeat in the Pacific, and to worry that China will try to convert some of its projects into the military bases that it has been, so far unsuccessfully, trying to establish in the Pacific.

When the Chinese naval hospital ship Ark Peace stopped in Tonga a few months ago, its commander said it was bringing “sincere love and medical skills”. But it’s easy for these military ships to bring much else.

Anna Fifield, a New Zealander, writes about Asia for the Washington Post.

This article was first published in the December 1, 2018 issue of the New Zealand Listener.


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