CANBERRA, Australia (AP) — Beijing has targeted aid in the Pacific to new diplomatic allies Solomon Islands and Kiribati, while Chinese economic support across the region has continued to decline, the Lowy Institute said Monday in its latest annual analysis of the regional aid.
China’s aid to the Pacific has fallen from a peak of $287 million in 2016 to $187 million in 2020 – the lowest level since 2008, when the Sydney-based international policy think tank began quantifying support for island developing nations in the Pacific.
At the same time, pandemic response measures pushed Pacific aid to a record $4.25 billion in 2020, a 47 percent increase over the previous year, according to Lowy’s Pacific Aid Map report.
Only 5 percent of Chinese aid to the Pacific went to pandemic-related support, according to the report.
The institute does not yet have full figures for 2021, but preliminary results show that the decline in Chinese aid has continued.
Pacific Aid Map program director Alexandre Dayant said China is investing more in the Solomon Islands and Kiribati — Pacific countries that have changed their diplomatic commitments from Taiwan to Beijing in 2019 — than what Taiwan had provided.
“Chinese aid remains a key diplomatic tool for Beijing in the Pacific,” Dayant said.
“New development finance has become narrowly targeted to specific countries,” he added, naming Kiribati and the Solomon Islands.
While Taiwan provided $8 to $9 million a year to the so-called Solomon Islands Constituency Development Funds, Beijing now contributes $11 to $12 million, Dayant said.
The funds go directly to lawmakers to spend and are criticized as a source of corruption.
Beijing has also scaled up the infrastructure planned for the Solomons to host the regional Pacific Games next year, Dayant said, describing China’s investment in the Solomon Islands as small but growing rapidly.
China also planned to finance an aircraft for Kiribati to boost its tourism industry in a deal that would not meet the rules of Taiwan’s aid program, Dayant said.
Australia’s new government has promised greater engagement with its Pacific neighbours. He blames his predecessor’s neglect of China’s bilateral security deal with the Solomons earlier this year, this raised fears of a Chinese naval base in the South Pacific.
Australia, the largest aid donor in the Pacific, made the announcement in the government’s annual budget last week an additional A$900 million ($570 million) in aid to the Pacific region.
Lowy’s researchers pointed to several reasons for China’s declining aid to the region, including a slowing domestic economy.
Pacific leaders were wary of Chinese “white elephant” infrastructure projects and falling into potential debt traps, Dayant said.
With the United States and its allies trying to counter China’s growing influence in the Pacific, Pacific leaders now had more potential development partners to choose from.
Lowy’s Pacific Islands Program Manager Meg Keen noted that Papua New Guinea had not received a new Chinese loan in three years.
Samoa had recently decided not to borrow from China to upgrade its port.
“We’re seeing different risk and return assessments, different modes of operation, but it’s very important that Pacific island countries make choices about what will best serve their development interests, and they have more choices because there’s competition,” Keen said.