Page last updated at 11:11 GMT, Friday, 24 July 2009 12:11 UK

China 'stumbling' in the Pacific

By Vaudine England
BBC News, Hong Kong

Fiji ruler Frank Bainimarama meeting Chinese premier Wen Jiabao, Beijing, Aug 08
China nurtures ties with Pacific nations who follow the 'One-China' policy

China's financial aid to the Pacific is unpredictable and secretive and leaves Pacific nations mired in debt, with few long-term gains, a study has claimed.

The aid policy is weakened by a focus on blocking the presence of diplomatic rival Taiwan, the Lowy Institute for International Policy in Australia said.

Their report does not argue for an end to China's Pacific presence.

It suggests instead that the recent thaw between China and Taiwan offers Beijing a chance to improve its aid.

The report, titled "China: stumbling through the Pacific" is based on research by Lowy Institute research fellow Fergus Hanson.

It reaches a series of challenging conclusions, but also points the way towards more meaningful interaction between China and the Pacific.


"China lacks a coherent strategy for its aid programme in the Pacific - beyond checking and reversing diplomatic recognition of Taiwan," the report states.

It also accuses China of tending to pursue "short-term objectives".

It cites the example of a $12.9m (£7.8m) swimming complex in Samoa "that one official quipped would be beyond the ability of even New Zealand to maintain".

China "should seize the opportunity presented by the diplomatic truce ushered in by the election of President Ma to refocus its Pacific aid programme
Fergus Hanson, Lowy Institute for International Policy

"China pledges aid in an erratic manner, funds projects without regard to recurring costs, and the secrecy surrounding its programme obstructs development outcomes, and breeds suspicion," it says.

Details of China's aid budgets are considered a state secret, it adds, although it appends a full list of projects in receipt of Chinese money in 2008.

Mr Hanson suggests that this approach has perhaps led China to "over-engage" with the military regime in Fiji, as seen in the $150m (£90.8m) soft loan to Fiji in 2007.

Commodore Frank Bainimarama took power in Fiji in a coup in 2006, has suspended the constitution, detained lawyers, journalists and churchmen and blocked elections.


The Lowy report does not disapprove of Chinese engagement in the Pacific, which it estimates provided $206m (£124.8m) in pledged grants and loans in 2008.

Instead it suggests better ways of doing it, made possible, it argues, by the recent thaw between traditional rivals China and Taiwan.

Frank Bainimarama (file photo)
Cmdr Frank Bainimarama has ruled out polls before 2014

Taiwan, which China regards as a renegade province, works hard to secure international recognition from states which can be persuaded to eschew the "one-China" policy of Beijing.

That competition has seen Pacific governments swing back and forth between recognition of China and Taiwan; China only aids those governments who recognise Beijing, not Taipei.

This has directly impacted on domestic politics in the Pacific, and has even resulted in occasional violence against Chinese communities at times of political stress.

This could be different, argues Mr Hanson in his report.

China "should seize the opportunity presented by the diplomatic truce ushered in by the election of President Ma [Ying-jeou] to refocus its Pacific aid programme... towards longer-term development goals that also better serve Chinese national interests," he writes.

Traditional donors should also explore innovative ways of engaging China's efforts in the Pacific, he suggests and Pacific states should pressure China to use more local labour, increase grant to loan ratios and assess recurring costs before projects are built, he recommends.

"China is often portrayed as pursuing a well-thought-out, long-term strategy to extend its influence in the Pacific," the report says.

"However, there is little evidence it has a comprehensive grand strategy guiding its approach beyond its tussle with Taiwan."

China sends aid to the Cook Islands, the Federated States of Micronesia, Fiji, Niue, Papua New Guinea, Samoa, Tonga and Vanuatu.

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