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China offers soft loan to Taiwan's Pacific ally Tonga

Taiwan accused China of "checkbook diplomacy" yesterday as Beijing announced a US$56 million soft loan to one of its Pacific allies.

Chinese Vice-Minister for Foreign Affairs Zhang Yesui (張業遂) and Tongan Prime Minister Feleti Sevele announced that the loan would be offered to businesses in the Tongan capital of Nuku'alofa to rebuild after last year's riots.

About 160 businesses were destroyed or damaged by burning and looting during the riots, which were set off by a political rally calling for reform of the semi-feudal political system.

Most companies did not have insurance coverage and lacked funds to rebuild, leaving the central business district of Nuku'alofa lined with many empty pockets. Sevele said construction should begin by year's end or early next year.

The loan agreement was signed as the 14 countries belonging to the Pacific Islands Forum met donor partners, including China and Taiwan.

Six Pacific island states recognize Taiwan rather than China, and analysts have accused the Asian rivals of aggravating instability in the region by using checkbook diplomacy to win loyalty from the impoverished island states.

Taiwan's Vice Foreign Affairs Minister Katharine Chang (張小月) denied it used such methods to win allies.

"That's very unfair to Taiwan. Taiwan will never do checkbook diplomacy," Chang said, adding foreign aid was subject to legislative scrutiny in Taipei.

"I think it is China, not Taiwan that is doing the checkbook diplomacy," she said.

Chang also rejected suggestions that Taiwan was a destabilizing influence on the forum after Solomon Islands Prime Minister Manasseh Sogavare boycotted last week's summit to instead travel to Taiwan for an official visit.
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